Preamble

The House met at half-past Nine o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Schools

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.]

Mr. Dennis Skinner: On a point of order, Mr. Speaker.

Mr. Speaker: On this matter?

Mr. Skinner: It is on business. Have you received information that there will be a Government statement today on the Bank of Credit and Commerce International debacle and the subsequent Government cover-up and all the fraud that is involved? It is high time that somebody came to the Dispatch Box—probably all three or four Ministers who are involved, to explain precisely what happened to the letters that were bandied about from one Minister to another. It is time that there was a public inquiry to clear up this matter.

Mr. Speaker: I remind the hon. Gentleman, if he does not already know, that the Prime Minister will be at the Dispatch Box to make a statement at 11 o'clock. In addition, on Monday there will be a debate on the Consolidated Fund in which the hon. Gentleman might be able to participate.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Michael Fallon): The full title of our debate is "Wider Choice and Higher Standards in Schools". Those are the first two aims of our education policy and they are closely linked. Wider choice lies at the heart of all our reforms over the past 12 years—that is, the right of parents to choose between different schools and different types of schools. We have begun to end the drab uniformity of council monopoly, under which the only choice was that of the education director.
Future historians will find it extraordinary that parents could be ordered to send their children to schools that they did not choose., not because those schools were the best, but because they were less full and less successful than the schools that the parents wanted. We have widened choice in five ways. First, we have widened it through the assisted places scheme. More than 50,000 pupils have benefited in the 10 years that the scheme has been running and 27,000 will have places for the coming academic year.
On Wednesday, the House debated the assisted places scheme, which costs about £70 million. That is little different from the cost of educating the same number of pupils in the state sector. What is different is that parents have been able to choose and that, under the scheme, less well-off parents have been enabled to choose the very best independent schools.
Secondly, we have widened choice through city technology colleges. The unfulfilled promise of the great

Butler Act was its failure to create technical schools of a calibre and reputation to match our great grammar schools. Even the good technical schools that existed were rubbed out by the Crosland comprehensivisation of the mid-1960s. It has taken a Conservative Government to restore great technical colleges in this country and to place them in industrial areas where skills are needed most.

Mr. Derek Conway: The House and parents will welcome my hon. Friend's comments about extending parental choice, which shows that the Government are prepared to trust parents with their children's education. At some stage, will the Government look at the catchment areas for city technology colleges, perhaps with a view to bringing them into line with local education authority areas, rather than having them arbitrarily set and stuck on a map by some faceless official? What we have done to local government we have not done to city technology colleges, in the sense that some parents from the poorer areas of my constituency cannot have their children considered for city technology places because they live outside an arbitrarily drawn boundary. I understand that the Government were trying get rid of such boundaries.

Mr. Fallon: I am sorry to hear my hon. Friend's comments, and I shall certainly look at his point about the extent of the catchment area.

Mr. John Fraser: Will the Minister give way?

Mr. Fallon: Perhaps I could say more about city technology colleges before giving way.
In four years, 13 city technology colleges have been set up, leading the way in curriculum and school management, and educating more than 8,000 pupils. Every one of those 13 CTCs is over-subscribed. At Haberdashers' there were 800 applications for 180 places. At Harris CTC, a recent open evening was attended by 2,000 parents of prospective pupils. Police had to close roads because of the congestion.

Mr. Derek Fatchett: Why has the Harris school been funded on the basis of 1,100 children on the roll, when fewer than 800 children attend it?

Mr. Fallon: The hon. Gentleman ought to look a little more deeply into what he reads about the costs of CTCs. The unit costs that have been published in The Guardian wholly fail to take account of the fact that these schools, although over-subscribed, are not yet operating at full capacity. As the pupils work their way through, unit costs will fall, but it is inevitable that they are higher at the beginning.

Mr. Fatchett: The Minister explains the costs by saying that the Harris CTC is a new school. The argument from the Department of Education and Science is that other new schools are funded in the same way. Under the local management of schools formula, is any other maintained school funded in exactly the same way as Harris?

Mr. Fallon: I am trying to get into the hon. Gentleman's mind—it is proving difficult—the fact that the CTC, although over-subscribed in its initial entry, is not operating at full capacity. There are bound to be front-loaded unit costs that are different from those pertaining elsewhere.
These schools are popular not only with parents but with teachers. At Bradford, where 12 posts were available, more than 1,000 teachers expressed interest in them. In short, these are the schools of the future. They have a different ethos, which includes a longer working day, often until 5 pm. At Macmillan CTC in Teesside, which I visited recently, parents told me that they could not get their children home in the evening. The House need not take my word for that. Two thirds of the intake at Emmanuel college in Gateshead comes from deprived or very deprived backgrounds. An article in The Times on 8 July said:
Truancy, a growing concern in many schools, is rare at Emmanuel, and discipline has posed few problems. There have been no expulsions or suspensions. Attendance at extra-curricular activities is good and 90 pupils are learning to play musical instruments.
However, although that college is popular with parents, it is not popular with the local education authority. Gateshead council has denied Emmanuel college the use of neighbouring playing fields. The chairman of the education committee, Councillor Brazendale, said of the college:
We don't want it in Gateshead. The sooner we can get rid of it the better.
Emmanuel, like other CTCs, has suffered a campaign of intimidation and non-co-operation
. This is so much so that, to quote The Times:
One father dropping off his daughter sums up the sentiments of many: 'I am delighted with the school. They are returning to the days of discipline without going over the top'. He insisted on anonymity 'You see, I work for the local authority,' he said.
That is the kind of fear that Labour local authorities inspire in those who express a preference for CTCs. What a way to treat a school.
I must report to the House no progress in the saddest case of all, that of 11-year-old Paul Campbell, who plays for Middlesbrough Town football club youth team. When he starts as a pupil at Teesside CTC in September, he will be barred from that team because Cleveland sports council, to which every other school on Teesside, including independent schools, is affiliated, will not affiliate the CTC. My hon. Friends the Members for Langbaurgh (Mr. Holt) and for Stockton, South (Mr. Devlin) have raised this with the Minister for Sport. The English Schools Football Association is considering the case.
Even if the hon. Member for Leeds, Central (Mr. Fatchett) does not agree with our policies on CTCs—I understand that he does not—and even if he does not yet appreciate how popular they are with parents, I hope that he will give an undertaking that this kind of petty and vindictive harassment of children for political reasons will cease forthwith; or must he really take out this kind of mean-minded ideology on an 11-year-old footballer? I await his undertaking.

Mr. Fatchett: As always, the Minister is not up to date with his briefing material. The Cleveland sports council is not controlled by the Cleveland education authority. I was in Cleveland three weeks ago. I made it clear, publicly, on local radio and in newspapers, that we see no point in excluding any youngster, from any school, from playing with the under-11s or any other football team. If the boy has the ability, he should be selected. That view is also held by my colleagues on the Cleveland Labour group. The

problem is persuading the Cleveland sports council, which is not controlled by the Labour party or the county council. We are using our influence, and if the Minister had been up to date, he would know that the message that we have given is clear. We choose on ability, not on the school that the youngster attends.

Mr. Fallon: The message that the House is getting from that report is that the hon. Gentleman has been to Teesside and failed to make progress. The Cleveland sports council may not be controlled by the local authority, but the local authority has representatives on it. We shall not be satisfied until that kind of petty intimidation comes to an end.

Mr. Fatchett: rose—

Mr. Fallon: I will give way if the hon. Gentleman will give an undertaking that he will go to Teesside and make some progress on this case, with his friends.

Mr. Fatchett: I shall explain this once again to the Minister. It may have come to his attention that he is, for the time being, the Minister, and I am still a Front-Bench spokesman for the Opposition. It will not long remain that way: there will be a change soon. The point about the Cleveland sports council, which the Minister has accepted, is that it is not a local government body. It is made up of teachers representing school sports. They cannot be ordered by the county council or the parliamentary Labour party. We shall use what influence we have, just as the Minister for Sport has tried to use influence and, I hope, the junior Minister in the Department of Education and Science has tried to use his influence. That is all that we have available to us.
I have made our position clear. I hope that it will be understood in Cleveland, but, in the end, it is up to the individual teachers. I hope that they will take the point that we have made clearly. It is stupid for the Minister to try to score cheap political points. We should be concerned about giving that youngster, if he has the ability, the opportunity to play for his football team.

Mr. Fallon: I can only say in answer to that that I have here the transcript of some comments by the chairman of the Cleveland education committee on 9 July, speaking on BBC Radio Cleveland. He said:
As far as Derek Fatchett's comments go, I have made it clear to Derek that his comments are regarded by people responsible locally as ill-advised. He came to this subject knowing very little of the background and the detail and paying scant regard to the concern and the anger felt in the teaching profession locally.
I advise the hon. Gentleman to reflect a little further.

Mr. Martin M. Brando-Bravo: I would hate the House and the public to think that this is a one-off situation affecting Cleveland. My hon. Friend will know, because there is a catalogue of information on this, that we have just the same problems in Nottingham, where the Nottinghamshire Labour-controlled local education authority has had a running battle with the magnificent CTC ever since its conception. It did not even want to provide a schools crossing warden. Children were denied a place in county orchestras. It still does not allow schools in the public sector to hire playing fields. There is a running battle of hatred between the education authority and anything that it does not control.

Mr. Fallon: Yes. That is not an atypical case, and that is perhaps the most alarming feature of all. I should think that every CTC could produce similar examples. As local Labour politicians are directly involved, I would have hoped for a strong commitment by the Labour party to do something about it.

Mr. Joan Ruddock: The Minister has suggested that there is hostility between all Labour authorities and their local CTCs. There is a CTC in my constituency, and there would be justification for hostility. There has been co-operation between Lewisham council and Haberdashers' CTC, but we find that, under the Government's direct threat of poll tax capping, the education authority had to take £5 million out of its budget before it began this financial year, that the CTC alone has been promised £5 million by the Government for its first year, and that it is asking for a further £1 million. The Minister must understand why bitterness and resentment arise. I do not endorse any of the things that he has described, but he must understand why some of us feel that resourcing is at the heart of higher standards, and that higher standards are not being offered through the Government to Lewisham's LEA, although, the Government are seeking to offer them to CTCs. That is an elitist policy which angers us.

Mr. Fallon: I welcome the fact that there is not overt hostility in the hon. Lady's area. I must tell her that one reason why Lewisham had to make economies of £5 million in its budget this year was the complete mismanagement of its spending last year. It was not until the introduction of local management of schools that councils such as Lewisham, and many others, had to cut their budgets and find out what they were spending.

Mr. Ruddock: I intervene again only because the Minister's information about Lewisham is incorrect. The £5 million is part of a £13 million cut from the budget before the beginning of the financial year on the direct instructions of the Department of the Environment because of the threat of poll tax capping. The Minister stands corrected.

Mr. Fallon: The plain fact is that Lewisham mismanaged its budget last year.
The third area in which we have extended choice is that of grant-maintained schools.

Mr. David Bellotti: Will the Minister give way?

Mr. Fraser: Will the Minister give way?

Mr. Fallon: Not for the moment.
Earlier this week, my right hon. Friend the Secretary of State was able to announce the approval of the 100th grant-maintained school, which is to start in September. In September 1989, there were only 18 grant-maintained schools. Already, the grant-maintained sector is growing and successful. More than 70,000 pupils will be walking through the gates of grant-maintained schools this September. More than 2,000 schools have expressed an interest in becoming grant-maintained, and more than 300 have balloted already.
Grant-maintained schools are successful and I shall quote their success with parents. Baverstock school in Birmingham received 350 applications for 210 places last

year, an increase of 50 per cent. over the previous year. At Bullerswood school, Bromley, there has been a 79 per cent. increase in applications for places in the coming year.
Grant-maintained schools are also popular with heads. I quote the head teacher of Ecclesbourne school, who said:
I am handing more of the administration to my bursar and turning my mind back to education. I would not miss what is happening here for anything. It is the most professionally fulfilling period of my entire experience as a head.
The head teacher of Hendon school has said:
Grant-maintained status has enabled the more flexible use of funds, ensuring that all the school's resources are targeted on meeting its educational aims. It has been possible to redirect the funds previously required to sustain the LEA bureaucracy towards supporting the school curriculum.

Mr. John Marshall: I thank my hon. Friend for quoting the remarks of the head teacher of Hendon school, Mr. Lloyd. Is my hon. Friend aware that, when Hendon school was under the control of the local authority, there were about 100 to 120 applications each year for the places that were available, but that there were 350 applications for the places available for the school year that begins in September 1991? Hendon school, which was under-subscribed when it was under the control of the local authority, is now a heavily over-subscribed school. It was the first grant-maintained school in London. Does its experience not advertise how successful the grant-maintained policy is with parents, pupils and teachers?

Mr. Fallon: It most certainly does. My hon. Friend makes the point most effectively.
I have another quotation that relates to grant-maintained schools. A former Labour councillor, Mr. Graham Gardner, said of the school in his area:
We are delighted and thrilled to be the first in Wales to opt out.
Mr. Gardner's remarks appeared in an article in the Daily Mail of 16 November. He is reported as saying:
Parent power had triumphed where Neil Kinnock had failed.
The article stated that not one Labour councillor supported Mr. Gardner.

Mr. Anthony Coombs: It is important to emphasise the popularity of grant-maintained schools with parents despite vindictive campaigns, in many instances, by local education authorities. One example of vindictive-ness is the attitude of Birmingham's local education authority towards Baverstock school. It is important also to emphasise the educational atmosphere that the popularity of grant-maintained schools creates.
Baverstock school provides a classic example. Eight years ago, Baverstock school could attract only 25 first-place choices, although it can take 180 pupils. My hon. Friend appears not to have the latest figures, which reveal that the number of first-place choices for Baverstock school increased to 400 this year rather than the 310 that he mentioned.
In addition, a new teacher, who came from a local education authority school in Birmingham, said that the greatest difference that she could see between teaching at Baverstock and her previous school, which happened to be the George Dixon school in the middle of Birmingham, was that, when she entered a class room at Baverstock, the pupils stood and were eager to learn. They did not insult her and spit at her, as they had done in her previous school in the middle of Birmingham.

Mr. Fallon: Yes. That is exactly right.
As with city technology colleges, we have been seeing the same hostility to grant-maintained schools. On the other hand, some education authorities have been co-operative with grant-maintained schools. Indeed, some enlightened local education authorities have encouraged their schools to become grant maintained. They see it as a sign of maturity that their schools are ready to run their own affairs and control their own budgets. Other LEAs have been openly obstructive.
We find that, quite often, parents that are looking to choose a secondary school for their children have not been told about the grant-maintained school in their area. In Tameside, the grant-maintained school has been expelled from the technical and vocational education consortium working group. In Kirklees, grant-maintained teachers are excluded from national curriculum meetings. In Newham, the director of education wrote three days ago to parents selecting schools—his letter is dated 16 July—in these terms:
Newham does not believe that the existence of this independent secondary school"—
that is the Stratford grant-maintained school—
is in the interests of the children of this borough. Newham has no responsibility at all for the education provided in this school and I am concerned about the ability of the school to provide a good education for your child since the numbers there are now so low. It is also the declared intention of Newham to begin procedures to close Stratford grant-maintained school at the earliest opportunity. This could be soon. You will obviously wish to be aware of this since it could have an effect on your child's education.
That is the position at local level. At national level, the Labour party plans to reintegrate grant-maintained schools into the very LEAs from which they sought independence. It plans a sort of systematisation of grant-maintained schools. If the House thinks that that is too strong a word, I refer it to the words of Lord Peston, who is an Opposition Front-Bench spokesman in another place:
These schools are a blot on the educational landscape and we shall do our best to remove them."—[Official Report, House of Lords, 12 July 1991; Vol. 530, c. 1594.]

Mr. George Walden: My hon. Friend's point is important, because it touches on the case of that 11-year-old boy. I accept the assurance given by the hon. Member for Leeds, Central (Mr. Fatchett). Nevertheless, the problem has arisen, and the letter from Newham has been written, because of the climate of intolerance that has been encouraged by Labour party policy, with its ideological, almost totalitarian, view of the education system.
Labour Members are basically saying, "There shall be no education system other than the comprehensive system, to which we are ideologically wedded. We will not rethink our policy; we will not change our minds." It is that climate which has given rise to the cases that have been mentioned. The hon. Member for Leeds, Central may try to put the problem right, but he should also reconsider his policy and his philosophy—and then the case of that 11-year-old boy and the letter from Newham would not have arisen.

Mr. Fallon: My hon. Friend is right. The Labour party's policy is deeply rooted, from the local level upwards through every level of the Labour party.
Most sinister of all has been a series of threats to the future of those who teach in grant-maintained schools. I must tell the hon. Member for Leeds, Central that next term 5,000 teachers will be teaching in grant-maintained schools—and the Labour party has plans for them. I shall quote Councillor Stephen Byers, a senior figure in the Labour movement. He is the Labour education chairman of the Association of Metropolitan Authorities. On 2 October last year, he issued a press release stating:
Now is also the time to warn heads and teachers of the possible consequences of remaining in a school which opts out. There can be no guarantee that their employment would be continued when that school returns to the local authority.

Mr. James Pawsey: My hon. Friend has painted an extraordinarily sombre picture of the policies and attitudes of Labour Members. If nothing else comes out of today's debate, I hope that Labour Members will be encouraged to reconsider their policies, for all the reasons given by my hon. Friends. Is it not amazing that there are only two Labour Back Benchers present today to participate in a debate on such an important subject?

Mr. Fallon: It is amazing. Two Labour Members hardly convey an impression that education is a key policy item. Like my hon. Friends, I attach some importance to the speech that we are about to hear from the hon. Member for Leeds, Central. I hope to hear that the Labour party has made some progress on issues such as city technology colleges and grant-maintained schools.

Mr. Fraser: The Minister referred to parental choice. What parental choice was there for parents who had children at Sylvan school before it became a city technology college, and who voted overwhelmingly against that?

Mr. Fallon: There was a choice because, for the first time in that borough, parents could choose between different types of school. They are no longer restricted to the local authority monopoly. The hon. Gentleman should be proud of the fact that he now has different types of school in his constituency.
The final way in which we are securing better choice is not just through new types of schools, but by delegating budgets to schools on the basis of pupil numbers and introducing more open enrolment, so that parents can choose. This year 80 per cent. of secondary schools—a total of 3,000—will have their own budgets, and 6,000 primary schools already have their own budgets. All schools will have their own delegated budgets by April 1994.
Earlier this year, we announced three improvements to budgetary delegation. First, any school that wants a budget earlier than April 1994, and is refused that by the local education authority, can now apply direct to my Department. Secondly, we have insisted that by next April all secondary schools should have their own bank accounts and cheque books, which will make a reality of their control of their budgets. Thirdly, we are for the first time, restricting the amount that can be held back by the centre —the LEA tax—to 15 per cent. of the total school budget as a maximum by April 1993.
Schools are now regaining control of their affairs. Local management of schools, although an interim and preparatory step to the final and fuller freedom of grant-maintained status, gives schools much more


freedom and control over their own budgets. I shall cite two examples. The head of Heathland school in Hounslow said in Education on 17 May:
We are beginning to realise that the Government was absolutely right to insist that the budgets were pupil driven, absolutely right to stand firm against demands that account should be taken of the actual costs of teachers' salaries. Freed from the concern that our school budgets should reflect the LEA's budget generation, we are beginning to plan expenditure according to our own individual strategic needs.

Mr. Terry Dicks: I am sure that my hon. Friend will correct me if I am wrong, but I understand that education legislation relating to special needs does not include the special needs of exceptionally bright children. Will my hon. Friend ensure that the new schools, as well as looking after the special needs of the mentally disabled and children with other disabilities, also look after the needs of exceptionally bright children? If we forget such children, we may as well forget the future leaders of our country.
My understanding is that the law does not provide for schools to take account of those special needs. With the widening choice that the Government are providing, we now have an opportunity to ensure that parents of bright kids can say to a school. "You are legally obliged to provide facilities for my bright child, in the way that you provide them for backward or disabled children."

Mr. Fallon: The representatives of the National Association for Gifted Children have been to see me on that point, and I shall certainly reflect further on it. The key point is that, through local management of schools, the heads and governors have more resources under their control to allocate as they see fit. Provided that they have sufficient headroom in the budget, they can make that special provision.
In case the House thinks that I am quoting only one of the best examples, I shall also quote from a school that has a more difficult budget, perhaps because historically it has been over-funded and its budget has now been adjusted in line with pupil numbers.
In The Times Educational Supplement, the principal of Chulmleigh community college in north Devon said:
It's been a bad month, and not one to repeat next year. But some good will come of it. Faculty heads must be less insular and learn to think more whole-school; some teachers will have to work harder and show more commitment; and every bit of the budget will be more carefully scrutinised. We shall also improve our public relations. Ten more children in the school would have saved all the anguish. We are losing twice that number to the private sector and elsewhere each year. There's a challenge for everyone: be sure about the quality, improve customer relations, watch the budget, and we may see off the redundancy spectre for good.
That tells an eloquent story about the success of local management of schools. Combined with more open enrolment, LMS means that all schools must be much more responsive to the local community. They have to keep up their numbers and offer what parents want. For us, wider choice is not an abstract but means practical power for parents—and that power will drive up standards.
Higher standards are at the centre of our education policy. We introduced a new national curriculum for the first time and we are insisting that all pupils are tested at ages seven, 11 and 14, before GCSE. It is extraordinary that, before 1988, nothing was compulsory. Pupils could drift through school without ever being given a spelling

test, doing any science, or taking much French. Worse, they could drift through school without ever knowing what was expected of them.
That drifting is at an end. Ours is the first Government to implement a compulsory curriculum, which introduces a new structure for children from age five upwards. It has been widely welcomed by teachers. It is true that many grumbled, with reason, at the pace of change and complained at the weight of the paperwork, but every school that I have visited accepts the principle of a fixed, basic curriculum as a framework for its teaching. It is a framework and not a straitjacket, as the speech of my right hon. Friend the Prime Minister emphasised. It should be simple and manageable—and flexible after a pupil has reached 14, so that those who want to pursue an academic route can do so, while others may choose to start earlier on the vocational path.
The national curriculum itself will raise standards. For example, all girls will be required to take science all the way through their school career, and every pupil will take a foreign language and study technology. Crucial to the success of the national curriculum is our insistence that what is taught will be tested—at seven, 11 and 14. The objective is to provide a check on progress, so that schools can compare their performance year on year, and parents can compare school against school.
In working together with the new chairman of the National Curriculum Council and with the Schools Examinations and Assessment Council, we will ensure that the curriculum and assessments will be manageable and sensible in future.

Mr. Pawsey: Can my hon. Friend confirm that, if his Department approves any application from a Muslim group to establish a grant-maintained school, such a school will be required to adhere to the national curriculum—and that it will apply equally to girls as to boys?

Mr. Fallon: I can certainly give my hon. Friend that assurance.
The GCSE is a success story. More pupils are entering every year, and the pass rate is rising. However, we need to ensure that those at the top who want to progress to A-levels will not be disadvantaged by the different treatment of course work as between GCSE and A-level. Course work for the latter will in future account for a maximum of 20 per cent. of the assessment, although for a GCSE it can still account for a maximum of 70 per cent.
My right hon. Friend the Prime Minister made that clear in his speech:
If the transition from GCSE to A levels is causing difficulties, we must level GCSE up, not lower A level standards down.
That is because the A-level remains our bench mark. Our recent White Paper on education and training clearly sets out our commitment to A-level, alongside our belief in a wider curriculum at sixth form. We want to see earlier and larger take-up of vocational courses. Some vocational policies lie beyond the scope of today's debate, but I assure the House of our unswerving commitment to A-levels and to the standards that they set.
We want more pupils to remain at school on the academic or vocational routes. This year, 60 per cent. of all 16-year-olds are staying on at school—but we are not satisfied yet, for we want more of them to continue into


higher education. When we came to office, only one pupil in eight entered higher education. Today, the figure is one in five, and by the year 2000 it will be one in three.
The other key to higher standards is a better-paid and well-motivated teaching force. We hope that next week we shall have, by statute, for the very first time, an independent pay review body for teachers, which will put them on a par with doctors, dentists and other professional groups. None of my right hon. and hon. Friends will forget the helpless ambivalence with which Labour first greeted the announcement of that body. Certainly we will never let any teacher forget that Labour—in kow-towing to the militants in the National Union of Teachers who wanted to preserve the right to strike—voted against a pay review body.
Our third aim is greater accountability. Each of our three Education Acts puts parents first, by giving them rights to choose their children's schools; to attend annual parent meetings; to receive information on the curriculum, exam results, and the school budget; and to have regular reports on their children's progress. We will build on those rights by ensuring more systematic inspection. As my right hon. Friend the Prime Minister said:
The school inspector should be the parents' friend.
Wider choice, higher standards and greater accountability are all threatened by Labour. Independent schools would lose their charitable status; the assisted places scheme would be phased out; city technology colleges would be scrapped; grant-maintained schools would be reintegrated; and local education authorities would be back in business—free to dictate policy to their schools, and to direct their customers around the schools in their system.
Labour always defends bureaucracy. When Labour runs cities such as Newcastle and Coventry, almost half those employed under the education budget are not teaching. Labour would not only restrict choice but fudge standards. Its plans include fudge and more fudge. At 16, a pupil could take any option—to stay at school, leave, or return—and still claim the same rewards. Labour has dreamed up something called the advanced certificate for education and training, which they call "ASSET"—which perhaps proves that Labour cannot spell. It would fuse academic and vocational qualifications in a glorious fudge—the same level for plumbers and philosophers, engineers and business students.
Every one of Labour's targets is empty or meaningless. The party's document, "Aiming High", states that every three or four-year-old should have a nursery place, but it does not give any date. Neither does Labour make any commitment. I understand that the hon. Member for Derby, South (Mrs. Beckett) does not give any priority to that pledge. Labour suggests also that all 16 to 18-year-olds will achieve five GCSEs within five years of a Labour Government, and that within 10 years, all 16 to 19-year-olds will gain at least the equivalent of one A-level.
Those are meaningless targets, having all the logic of Soviet tractor production. If a target must be met by a certain year, it can be met only if the standard is adjusted —and adjusting the standard, as we have come to learn, means debasing it. That is exactly what Labour is planning.
Let us go into Labour's education policy more deeply, and examine the Labour education organisation, the

Socialist Educational Association. My hon. Friends may be interested to know that the association's motto is "Educate, Organise, Agitate". Its membership includes the Leader of the Opposition and the hon. Member for Blackburn (Mr. Straw). I do not know whether the hon. Member for Leeds, Central is a member; the association may be one of those organisations from which Front-Bench spokesmen have forgotten that they are supposed to resign.
The Socialist Educational Association is not at all happy with the curriculum. It would like a curriculum that was
pluralist, internationalist and global in approach. All students should leave school having had the chance to write poetry and to understand how Fascism was defeated in the 1940s.
Nor is the association happy with the GCSE. It appears to think—I urge my hon. Friends to contain themselves at this point—that the GCSE is too tough; it wants it to be
broadened to take in all the ability range.
Certainly, the association is not happy with sixth forms. It wants them to be swept away, along with A-levels, in an orgy of anti-elitism. Curiously, it is also not happy with Labour's ideas. At a recent conference in Luton, a resolution called on the Labour Front Bench to
stop being defensive and bland over 16 to 19 proposals.
The association would prefer everyone to receive a grant at that stage.
Finally and most revealingly, the Socialist Educational Association is not happy with parental choice:
Too little attention,
it says,
has been given to continuity between primary and secondary schools. This would be improved if all the children transferred to their local secondary school from feeder primary schools. Although some parental choice seems inevitable, many problems would be solved if schools ceased to feel that they were competing for customers.
There—with the public relations floss scraped off—is the true mind of the Labour party. That is how the party runs Lambeth and Liverpool; that is why Lambeth voters are voting for grant-maintained schools, and why Labour voters there have been begging the Department to intervene. That is why some Lambeth parents will do anything, even cross the river, to escape educational socialism.
Let us be in no doubt about what a future Labour Government would hold in store, should one be elected next year. Let me paint the picture. We would see the closure of many independent schools, robbed of their charitable status; the end of the assisted places scheme; the destruction of 13 city technology colleges; the reintegration of perhaps 200 grant-maintained schools, against the democratic wishes of their parents; and the end of A-levels —this year's new sixth formers could be the last to sit that well-established examination.
Worse than all that, the bureaucrats would be back in charge in the classrooms, and all the policies that go with that would return: the watch on gender rather than grammar, and the insistence that racial discrimination takes priority over linguistic discrimination.
Far from putting more money into education, Labour, as we already know, would take money out of the system. Under Labour, those earning more than £20,000 a year would pay more tax. When the election comes, we shall ensure that the message gets across in every constituency in the country: Labour would increase tax for the average


secondary school teacher at the top of the scale, who now earns more than £20,000 a year. That is taking money out of the education system, not putting it in.
Conservative Members remain committed to our reforms—fundamental but necessary reforms, protracted in their implementation but overdue. Our education policy puts parents first. We believe that the key to higher standards lies in wider choice and greater parental accountability.

Mr. Derek Fatchett: The Opposition welcome this debate on standards in education, which is the first education debate in Government time that we have had in the current parliamentary year. Every other education debate has been sought in Opposition time. The Government published what they claim to be important White Papers on the reform of education and training for those over 16, but none the less could find no time in which to debate the issues.
We always welcome debates on education. One thing is abundantly clear: whenever education is debated, it is good for the Labour party and for Labour support. [Interruption.] Will Conservative Members keep quiet for a moment?
According to a current opinion poll, the Labour lead in regard to education—

Mr. Simon Burns: Is falling.

Mr. Fatchett: No, it is not falling. According to the most recent Gallup poll, it is over 24 per cent.
When education is debated and the Conservatives' record is put under the mircoscope—when Ministers are seen on television—we observe one simple factor.

Mr. John Marshall: Will the hon. Gentleman give way?

Mr. Fatchett: Will the hon. Gentleman be patient for a few moments? I have only just started.
When the Government's record is exposed, Labour's opinion poll lead increases. That is why we always welcome education debates.
The Minister's speech was well trailed and well rehearsed. It was in the Conservative research department brief and I had the pleasure of reading most of it along with the Minister. The delivery was perhaps not as good as the original text, but we expect little better from the Minister.
Interestingly, the Minister's speech concentrated hardly at all on standards for all our children. We need to talk about that. Labour's aspiration and ambition are to increase standards across the education system and, in that regard, we share a concern felt deeply by parents.
Conservative Members will no doubt have seen a poll, published in early spring, which showed that British parents felt the greatest anxiety in western Europe about education standards. That concern extends to the Conservative party. A Carlton club political committee seminar held in March 1991—and, incidentally, attended by the junior Education Minister—also discussed standards. The brief on that occasion was slightly different from the Minister's brief this morning, in which he seemed to be suggesting a very different line in terms of the Government's performance.
The Carlton club seminar referred to anxiety about standards and said that the Government's education

reforms were not working. Present on that occasion—at a meeting chaired by a former Cabinet Minister, the right hon. Member for Sutton Coldfield (Sir N. Fowler)—was the present Minister. Now, only a few months later, the Minister is trying to pretend that standards are improving. That came from the Carlton club, deep in the heart of the Conservative party. Only this week, a report from the disbanded Assessment of Performance Unit showed a slight decline in writing standards, according to the reports in The Daily Telegraph and elsewhere.

Mr. Fallon: Will the hon. Gentleman give way?

Mr. Fatchett: I shall give way in a few minutes.
That sets the debate against an interesting backcloth. There is parental concern about falling standards. There is also concern in the Conservative party, and there is some objective evidence of falling standards, but the essential fact to remember in all this is that any 16-year-old leaving school this week, at the end of his or her period of compulsory education, will have been educated under only one Government, the Conservative Government who have been in power for the past 12 years.

Mr. Andrew Mitchell: Hear, hear.

Mr. Fatchett: The hon. Gentleman says, "Hear, hear". That makes the essential point, does it not? Who is responsible if standards are falling? The Government try to persuade us that others are responsible. Sometimes, it is the fault of teachers and sometimes the fault of parents. The Minister seems to think that it is the fault of television companies and is developing his own blacklist of television programmes that children should not watch. We are given numerous excuses—a long list of those responsible for any decline in standards.
Is not the simple fact that the Government have been in office and have presided over the education system for 12 years? If they have any sense of personal and collective responsibility they will put up their hands and say, "We are the party that has been in charge and we are responsible. If there is a fall in educational standards, do not blame others. Blame the Conservative party, which has presided over the collapse of educational standards". That is the key lesson to be learnt in this debate. The Government alone have been responsible for the education of any youngster leaving school this week. If that youngster suffers from a fall in standards or a reduction in opportunities, he or she should blame the Conservative Government.

Mr. John Marshall: The hon. Gentleman alleged that Labour had a lead in the public opinion polls. Is not a much more important question how individual parents react when they have a choice put before them? Is the hon. Gentleman aware that, in January 1990, 1,600 pupils came from the people's republic of Brent to be educated in the Conservative-controlled Barnet education authority area? Is not it significant that, where parents have a choice of having their children educated in a Labour or a Conservative borough—this includes the hon. Member for Blackburn (Mr. Straw)—they choose to go to a Conservative borough? Does not that show that parents have more faith in Conservative councils and does the hon. Gentleman accept that such councils produce much better results than their Labour-controlled counterparts?

Mr. Fatchett: I am surprised that the hon. Gentleman wishes to criticise his colleagues in Brent, where I understand the Conservatives are now in charge.
What have the Government done about standards in the past 12 years? What is their record? They have failed in so many ways. They have either done the right thing incorrectly or they have done the wrong thing or they have done nothing at all. We are virtually the only country in western Europe that does not value nursery education and whose Government do not recognise the need to give youngsters a good start. The Minister knocked Labour's ambitious education targets. It would do him good to talk to his ministerial counterparts—some Conservative, some Socialist—in western Europe who will tell him that they have very ambitious targets for young people starting education in their early years. They regard education in the early years not as a drain on resources but as an investment in the future—an investment which they must make if they are to improve educational standards.
It is always worth quoting the remarks of those within the Conservative party. The Carlton club tells us what has happened to the important nursery education service under the Government:
Under the Conservative party nursery education is in danger of becoming the Cinderella of the education system.
No other Government and no other country would allow such an important provision to become the Cinderella of the system. The Government try to conceal their record and, as always, their statistics should be accompanied with a health warning.
The Carlton club continues:
Worse is yet to come, for the same Government policy document on education then goes on to claim, '48 per cent. of under-fives are now in nursery schools. These figures compare excellently with those of many other European countries'".
It is a pleasure to find that some people in the Conservative party recognise the truth, and the Carlton club document then does just that:
Regrettably, this claim is both false and misleading, and the true picture was accurately stated at the Carlton club education seminar by Malcolm Thornton MP, the Chairman of the Select Committee, who said, 'Sadly, the United Kingdom has one of the lowest proportions of children under five in education of the advanced industrial nations'".
The Carlton club document then provides graphics—presumably, realising that that is the best way of getting information across to Members of the Conservative party—under the heading "bottom of the class". That is not what the Minister and Conservative central office claim and the figures in the Carlton club document may come as a bit of a surprise to hon. Members who rely on central office briefings. The percentage of all three and four-year-olds in education in Belgium is 96 per cent. In France, it is 95 per cent.; in Italy, 88 per cent.; in Spain, 66 per cent.; in West Germany, 51 per cent.; and in Holland, 50 per cent. There, at the bottom of the list, is the United Kingdom with only 44 per cent. of all three and four-year-olds in education. How can we raise educational standards when the important early years are ignored by the Government? They do not invest in our young children and we will not improve standards without that investment. They have failed to do something that is crucial to the improvement of educational standards.
One can improve standards in other ways, of course, but that requires some consistency on the part of the Government and this Government's Ministers show a

remarkable lack of consistency. They are learning to swim and, on almost every occasion, we see them going down gently in the process, shouting for help.
Let me give two examples. The first concerns the practice and experience of assessment at the age of seven. No one has ever denied the need for diagnostic assessment. That is a myth which Ministers and Back Benchers like to peddle. On the Committee that considered the Education Reform Act 1988, there was never any difference between us on the need for assessment. We all recognise that good teaching is supported by assessment and testing and both the Labour and the Liberal parties expressed that view in Committee. Four years, two Prime Ministers, three Secretaries of State and seven Education Ministers later, no one yet knows how next year's seven-plus assessment will work. Neither teachers nor parents know and I suspect that Education Ministers simply do not have any idea. That is leaving aside what is going to happen with assessment at 11 and 14.
We all remember the claims of the Home Secretary, then Secretary of State for Education, that it was possible to take from a filing cabinet somewhere in the Department a series of assessment tests that could be implemented almost at the stroke of a ministerial pen. For two years children aged seven have been used as guinea pigs and teachers have had no clear definition of what is expected of them. That is all because we have Ministers who are incapable of making up their mids and who simply do not know what they want to use assessment for and what is its value. That inconsistency make life difficult for teachers and makes it difficult to raise standards. Above all, it gives an impression of a Government and Ministers who are not on top of their job and are unable to perform effectively to raise education standards.
I shall give another example—the GCSE, an examination introduced not by the education establishment, which is much criticised by the Government, but by the former Secretary of State for Education and Science, now Lord Joseph. It was introduced by the Conservatives, made to work by individual teachers, supported by parents and, subsequently, even this morning, praised by Ministers. There is a consensus.
What happened? Much of the fundamental thinking behind the GCSE, Lord Joseph's thinking, which has been praised by Ministers, was changed at a stroke in the Prime Minister's speech two weeks ago. There was no consultation with teachers or parents—just a prime ministerial whim announced at the Cafe Royal. Is that the way to improve standards and our education system? If we expect commitment from teachers and support from parents, the Government need to show consistency to improve standards.
The Government could have built on the consensus, but they have failed to do so. The Minister rightly said that there has been a strong element of agreement about a national curriculum. Again, there was no doubt about that in terms of the Education Reform Act. If the Minister were not such a newcomer to education debates, he would know that during the 1987 general election all three main political parties supported the idea of a national curriculum. There will always be arguments about detail, but not about principle, and that education principle was widely accepted.
There is a consensus about change, improvements and raising standards, but what have the Government done? Over the past two weeks, they have made two


appointments—David Pascall to the National Curriculum Council and Lord Griffiths to the School Examinations and Assessment Council. Both people were members of the No. 10 policy unit under the previous Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher). Both appointments were clearly party political. According to one profile, Lord Griffiths seems to have little to offer in certain respects. The profile says:
A former Dean of the City University Business School, he has reached eminence by compliance … and by constituting no threat to the Prime Minister's own intellectual limitations.
That may not have been the most flattering of comments. Many teachers and many people involved in local government and in education have noticed that, yet again, the Government believe that making appointments to Government bodies is the sole right of a particular ideological wing of the Conservative party.
We will never build an education consensus and raise standards if education is used as the plaything of one ideological element in the Conservative party. What can be seen from those two appointments, particularly that of Lord Griffiths, is a Government and Ministers who like to hear comments that support their ideological position. We have seen that in the health service. We saw it from the present Secretary of State for Education and Science when he was Secretary of State for Health—each of the health authorities was stripped of political opposition and people were replaced by Conservative party supporters and placemen. That is happening again this time.
If we are to have a system of independent bodies, Ministers should have advisers who are candid friends and are prepared to say, "You are getting it wrong. You need to change." But we are likely to get the ventriloquist's dummies who will give Ministers the responses that they want. There can be no faith in a system that fails to build on consensus but simply builds on the ideology and commitment of one section of the Conservative party.

Mr. Fallon: The House will deeply resent that personal attack on two important figures in the education world. I wish to correct the hon. Gentleman. Mr. David Pascall has not been appointed to the National Curriculum Council; he is already a member of it. He has now been appointed chairman of the council. In addition, I should have thought that most teachers would welcome the fact that the previous chairman of the School Examinations and Assessment Council, who was a civil servant, has been replaced by a man who has spent almost all his life teaching.

Mr. Fatchett: The Minister does not try to defend what are clearly political appointments. Those appointments will undermine a great deal of faith in the legitimacy of the education system. If the Minister looks at Labour's proposals for an education standards commission, he will see how a party that has respect for a pluralist democracy intends to work when it takes office either later this year or next year. Appointments to that body will be approved by the House of Commons Select Committee on Education, Science and Arts. We will ensure that there is independence and faith in the system and that people have respect for it. Because of the two appointments to which I referred, the legitimacy of the good work that has been developed by the NCC and the SEAC will be questioned.

Mr. Anthony Coombs: The hon. Gentleman makes much of the need to build a concensus in the education

system about reforms. How does he square that with the views which were made known publicly by Nigel de Gruchy, the general secretary of the National Association of Schoolmasters/Union of Women Teachers, on the education standards commission? Mr. de Gruchy said that he was hostile to it. Doug McAvoy, the general secretary of the National Union of Teachers, described the proposed commission as a gimmickly idea, meant more for public relations than to produce any substantial improvements in education standards.

Mr. Fatchett: Conservative Members who rely on Conservative party research department briefs should look at the date on those briefs. We launched the education standards commission document in June this year. If the hon. Gentleman looks at the press cuttings, he will see what Mr. de Gruchy and Mr. McAvoy said. June 1991, rather than any earlier date, will be useful to the hon. Gentleman. The Government are undermining the consensus in our education system and therefore taking away the commitment to improve standards.
There is another key point—standards will never be improved if there is no investment in the education system. That is true of the Government's record. Parents say that too many of our children are educated in crumbling schools. The Government's inspectorate talks about a backlog of repairs costing £3 billion to £4 billion. That means that many of our children will be in schools with leaking roofs or in primary classrooms that do not have running water or the facilities that make it possible to teach aspects of the primary national curriculum.
How does one improve education standards when there is such a poor record in terms of crumbling schools? When the Conservative Government leave office in a few months time, they will be remembered as the Government of crumbling schools, because they have brought schools in many parts of the country to a low standard. This is the only Government in western Europe in the 1980s who have been prepared to cut education expenditure as a percentage of national wealth. In 1979, when Labour left office, 5·5 per cent. of the national wealth was devoted to education. Ten years later, in 1989, the figure was 4·6 per cent., which shows the decline in priority.

Mr. Donald Thompson: rose—

Mr. Fatchett: The hon. Gentleman has only just entered the debate. I know that he is a quick learner, but he is not that quick. I shall give him time to become accustomed to the climate and then I shall give way to him. I must tell him that unlike his previous experience in agriculture, education debates are rarified occasions, so he must take his time before intervening.
In 1979 the figure was 5·5 per cent. and in 1989 it was 4·6 per cent. That shows the lower priority that the Government give to education. That priority has been declining, but the Government have the audacity to lecture other people this morning about education standards. This Government have failed for a decade to improve standards of education.
However, there are standards about which the Government know a little—double standards. They like to experiment with ideology in the maintained sector, but Ministers and members of the Cabinet send their children to schools in the private sector. They were opting out of the maintained sector before the principle of grant-maintained schools was even thought of in the Education


Reform Act 1988. No privilege is too expensive for the children of Ministers and members of the Cabinet but for our children who use the maintained sector, the right to a decent education costs too much.
The hon. Member for Buckingham (Mr. Walden) underlined the idea earlier this year when he wondered how one could have faith in the Government's education reforms if Ministers were not prepared to use the state education system.

Mr. Walden: I am beginning to wish that I had not written the pamphlet to which the hon. Gentleman refers because I have had to correct Opposition spokesmen about it so often. It was called "The Blocked Society". The reason behind the idea of a blockage was that I believe we have a blocked education system because the private sector, which has every right to exist, has far higher standards than the state sector. The state sector is blighted by a false ideology and a false philosophy to which the Opposition subscribe. That is why people continue to send their children to private schools, and I regard that as extremely unhealthy and socially damaging. That is what I said in the pamphlet.

Mr. Fatchett: I am grateful for that clarification, but it might be helpful if I quote the crucial sentence from the pamphlet. The hon. Gentleman wrote:
When the Government claim that the state sector has changed out of all recognition as a result of their policies, why do government Ministers still steer clear of it?
That is the crucial question to which the Minister has no answer. Why should parents have faith in a Government who are not prepared to trust with the education of their own children the system over which they have presided for 12 years? That is the Government's double standard and that is the crucial question which must be answered.
There are also double standards in other respects, for example, in funding. It always amuses me that in these debates it is the Labour party that is supposed to have an ideology and the Conservative party that is supposed to have none. The Conservative party is supposed to be the party of the pragmatist, of the common-sense person. As the hon. Member for Buckingham said, it is the party which has views. To judge from what the Minister said this morning, I think, that he might be rather annoyed and irritated by the comment that he has views—I suspect that he has a clear ideology about grant-maintained schools, city technology colleges and independent schools. The Government's policy is invested with a high level of ideology. Of course, when elements of that ideology clash, the Minister has no answer other than to push forward with the bad element of ideology which he considers to be the most important.
That was most noticeable when my hon. Friend the Member for Norwood (Mr. Fraser) intervened about the Harris CTC, the previous Sylvan school. The Minister had made a number of comments about parental choice. The parents at Sylvan school had held a ballot on whether the school should become a CTC and they voted against the idea. The Government took no account of the parents' views and went ahead to form a CTC. That shows the Government's regard for parental views and that they will listen to them only if they agree with the ballot result. They

are interested not in the principle of a ballot but in an outcome that ensures that they can move in their chosen ideological direction.

Mr. Fallon: I hope that the hon. Gentleman will answer the direct anecdotal evidence that I laid before the House. A recent open evening at Harris CTC was attended by more than 2,000 parents of prospective pupils and the police had to close local roads because of congestion. Is not that that the clearest possible evidence that parents in the locality welcome the wider choice provided by such colleges?

Mr. Fatchett: The Minister has again failed to respond to the main point which was made by my hon. Friend the Member for Norwood. If the Government believe in ballots, why did not they take notice of the views expressed by the parents at Sylvan school? Those parents clearly rejected the idea of the school becoming a CTC. It is no good the Minister nodding his head. The parents rejected the notion of a CTC. Why did the Government take no account of the outcome of the ballot if they believe in such ballots? I am happy to give way again to the Minister.

Mr. Fallon: If I cannot persuade the hon. Gentleman that 2,000 parents clogging the streets of Lambeth to attend an open evening at a new college is not evidence of parental interest, I do not know what will convince him.

Mr. Fatchett: The Minister is not doing very well.

Mr. Fraser: rose—

Mr. Fatchett: I shall give way after I have given the Minister another opportunity to answer. It seems that this debate is becoming an educational re-sit. We have twice asked the Minister a question about the ballot but he has refused to answer. I put the question to him again. We do not want to hear anecdotal evidence about a parents' evening—we want a simple answer. If the Minister believes in ballots, why did not he take account of the views expressed by parents at Sylvan school? Was it because the Minster will take account of ballots only when the outcome agrees with his ideology? He is a member of a party which yesterday lectured the Soviet leader about democracy but which takes no account of parents' views. I shall give the Minister a third opportunity to answer if he wishes to do so.

Mr. Fallon: I shall willingly take it. I have already described to the House how all the 13 new CTCs have been oversubscribed from the day they opened their doors. I have also described the memorable evening in Lambeth when police had to close local roads because of congestion when more than 2,000 parents attended an open evening to hear more about the college.

Mr. Fatchett: That is the Minister's third failure. Those of us who know a little about show jumping know that at the third failure the horse is disqualified. After three failures I think that the Minister should be withdrawn.

Mr. Fraser: I remind my hon. Friend that in a ballot about the break-up of the Inner London education authority 94 per cent. voted against it, but there was no recognition of that fact.

Mr. Fatchett: We seem to be tapping a rich vein of interest here. My hon. Friend the Member for Norwood points out yet another ballot—the ballot that was held by


parents on the future of the Inner London education authority. More than nine out of 10 parents voted for the continuation of the Inner London education authority, but their views were totally disregarded. Earlier, we had a lecture from the Minister about choice for parents. From the Minister's comments, we can see how far that choice goes. It does not extend to the parents of Sylvan school who did not want their school to become a city technology college; they voted against it. That choice does not extend to the parents of children at Inner London education authority schools, because they also voted overwhelmingly against the abolition of the authority. This Government listen to parents when parents agree with them; they totally disregard parents when parents offer an alternative view.

It being Eleven o'clock, MR. SPEAKER interrupted the proceedings, pursuant to Standing Order No. 11 (Friday sittings).

Group of Seven

11 am

The Prime Minister (Mr. John Major): With permission, Mr. Speaker, I will make a statement on the economic summit held in London from 15 to 17 July, and the subsequent meeting with President Gorbachev. I was accompanied at the summit by my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer. The economic declaration and the separate political declarations issued at the summit have been placed in the Library of the House.
The themes of this summit were "Building World Partnership" and "Strengthening the International Order". Our common aim was to build on the movement towards freedom, democracy and the open economy which was the theme at last year's Houston summit. I believe that we achieved valuable and productive results. In the political discussion, there was full support for our proposal for a United Nations register of arms sales. We agreed to consult on the guidelines that apply to conventional arms sales, and we agreed on restraint in the transfer of advanced technology weapons. We agreed also that donor countries should take account of military expenditure when deciding on aid programmes. We also agreed a number of steps in preventing the proliferation of nuclear, biological and chemical weapons.
We agreed that we should make preventive diplomacy a top priority in the United Nations. We proposed the establishment of a United Nations disaster relief co-ordinator so that the United Nations can in future take the early action that has sometimes been missing in the past.
We agreed also on the need for confidence-building measures by both sides in the Arab-Israel dispute, including the suspension of the Arab boycott and of the Israeli policy of settlement in the occupied territories. We encouraged South Africa to pursue policies that will permit normal access to all sources of foreign borrowing. That is vital to enable the economic growth that will be necessary for a successful conclusion to the political negotiations.
In our debate on the world economy, we recognised increasing signs of economic recovery. These are welcome, but require us to maintain policies aimed at sustained recovery and price stability. This means prudent and vigilant fiscal and monetary policies, to bear down on inflation.
All the summit leaders recognised that the world cannot afford a failure in the Uruguay round of trade negotiations. We committed ourselves to completing the round by the end of this year. Crucially, we committed ourselves to remain personally involved to ensure that that happens to resolve any disputes. Action will be needed on services, intellectual property, trade access and agriculture.
We reaffirmed our commitment to support reform in the countries of central and eastern Europe. For them, trade access is vital. We cannot encourage them to build market economies and then deny them a marketplace in which to sell their goods. The European Community has led the way in offering access through the association agreements which are now being negotiated.
We devoted a lot of time to the problems of developing countries and secured agreement on the need for additional debt relief measures for the poorest, most


indebted countries, going well beyond the Toronto terms agreed in 1988. I have been pressing for this since I launched the Trinidad initiative as Chancellor.
At the summit, we committed ourselves to work for a successful United Nations conference on environment and development in June next year. By the time of the conference, we aim to have achieved, in particular, a framework convention on climate change and agreement on principles for forest conservation. We also hope to negotiate by the end of next year a framework convention on bio-diversity. We agreed also to support financially the implementation of the preliminary steps of a pilot programme for the conservation of the Brazilian rain forests.
Earlier summits have stimulated effective action in tackling the trade in illicit drugs. This year, we asked the Customs Co-operation Council—on the basis of an initiative by the United Kingdom—to intensify its work and liaise with international traders and carriers to curb the spread of drugs.
These global issues require the involvement of all. Developing countries and east European nations are playing an increasingly active part. But one great country has been until now largely detached from the international economic system. That is the Soviet Union. We had a productive, substantial session with President Gorbachev. It was an historic occasion. The emphasis was on informal, frank and direct discussions.
We reached agreement on six specific points. The first was special association with the International Monetary Fund and the World bank. Both the fund and the bank have a wealth of experience in helping Governments to work out their own economic reform programmes, especially in the crucial areas of fiscal, monetary and structural policies.
Secondly, the international institutions—the Organisation for Economic Co-operation and Development and the European Bank for Reconstruction and Development—as well as the IMF and the World bank—are to be asked to work closely together in their support of the Soviet Union. They can provide the Soviet Union with practical advice, know-how and expertise to help create a market economy.
The third point was intensified technical assistance. We believe that there should be greater co-operation in the following sectors in particular: energy, defence conversion, food distribution, nuclear safety and transport. Yesterday, I announced an increase in Britain's know-how fund assistance from £20 million to £50 million.
The fourth point was improved trade access to markets for Soviet goods and services. This would also help to attract more inward private investment.
Fifthly, it was agreed that, as chairman of the summit, I should, on behalf of summit colleagues, follow up our meeting and visit Moscow before the end of the year to review progress. I look forward to doing so.
Sixthly, we agreed, in response to President Gorbachev's invitation, that Ministers of Finance and of Small Business should go to Moscow for discussions with their Soviet counterparts. My right hon. Friend the Chancellor hopes to do so soon.
This was a landmark meeting with President Gorbachev. It will, I believe, be seen as a first step towards

helping the Soviet Union to become a full member of the world economic community. I believe that it was a successful summit, and I commend the outcome to the House.

Mr. Neil Kinnock: May I first thank the right hon. Gentleman for his statement on the summit and on his meetings with President Gorbachev? I am sure that everyone agrees that it was good to see President Gorbachev in London again.
On the summit's political declaration on strengthening the international order, may I welcome both the Prime Minister's and the general commitment to developing and strengthening the United Nations in a variety of ways? May I also support the specific declarations dealing with the Gulf and the middle east, with Yugoslavia, with the drugs trade and with terrorism? May I especially welcome the general undertaking given to make more effective the means of providing international humanitarian aid? Can we take it from that that the Prime Minister will now change the policies that have cut Britain's aid budget in half in the past 12 years?

Mr. Terry Dicks: You are a small-minded, silly little man.

Mr. Kinnock: The figure is £8 billion down on 1979 and people are starving because of that. We all know the view of the hon. Member for Hayes and Harlington (Mr. Dicks) of the third world.
May I tell the Prime Minister that I share his disappointment on the failure to get the full agreement that he was expected to achieve on debt relief under his Trinidad terms? Even though those terms would have affected only non-operational debt amounting to just over 1·5 per cent. of total third-world debt, the proposal was useful. Does the Prime Minister expect the United States and Japan to change their stance and support his proposal at a later stage?
The G7 commitments to achieve the effective banning of chemical and biological weapons and to maintain and reinforce the non-proliferation treaty are obviously welcome. The proposal to establish a register for arms sales and restrain the transfer of high technology weapons is also commendable. Does the Prime Minister also favour stronger measures to control arms sales, particularly in sensitive areas, such as the middle east and the Gulf, and to Governments with records of repression?
The whole House will congratulate President Bush, President Gorbachev and their negotiators on securing the historic strategic arms reduction treaty. Does the Prime Minister believe that it will be necessary to proceed, in due course, to a START 2 process with British participation in the negotiations?
Does the Prime Minister recall that, 11 days ago in a speech at Olympia, he solemnly said:
The environment will feature strongly on the G7 summit agenda.
He said that it was incumbent on the G7
to give a strong lead".
As the host for the G7 meeting, can he tell us why the critical subject of the world environment was discussed for only 15 minutes? That was something of a global disappointment, to say the least.
We welcome the commitment to complete the GATT Uruguay round by the end of this year. Does the Prime Minister recognise that successful completion must involve


a wide-ranging reform of the common agricultural policy leading to the elimination of CAP subsidies? Is that not essential in order to achieve a parallel elimination of the high United States subsidies to agriculture? Would not the consequence of reducing subsidies be a significant boost to the industrial competitiveness of the European Community? Does the commitment that the Prime Minister made at the summit to
a substantial reduction of tariffs and parallel action against non-tariff barriers
include the multi-fibre arrangement? Will he assure us now that he will agree to no change of policy that could tell to the disadvantage of the British clothing industry, which is already under severe pressure as a consequence of international conditions and the Government's domestic policies? [Interruption.]

Mr. Speaker: Order.

Mr. Kinnock: The fact that I do not engage in the wall-to-wall sycophancy practised by the press should not upset Conservative Members. I am sure that the Prime Minister will agree that these are important questions and that he will seek to answer them.
When the Prime Minister was discussing with the other G7 members the communiqué's reference to
increasing signs of economic recovery",
did he tell them exactly where those "signs" were in the British economy? Did he tell them about the biggest rise in British unemployment in any June in post-war history, or did he give comfort to our competitors with news of the fall in British output and investment which his policies have brought? Did he explain how, as former Chancellor, he managed to get Europe's only oil-rich economy to the bottom of the G7 league?
How do the increases in the Government's borrowings this year and those planned for next year fit into the G7 statement that
continued progress in reducing budget deficits is essential"?
In what ways do the continued extra Government borrowings, resulting from the slump caused by the Prime Minister's policies, constitute "continued" reductions?
I commend the provision of further technical assistance to the Soviet Union and the offer of special membership of the International Monetary Fund and the World bank. Why did the G7 not endorse the European Council recommendation that the lending capacity of the European Bank for Reconstruction and Development to the Soviet Union be increased? Why are the Government hostile to the provision of a stabilisation fund to facilitate the internal convertibility of the rouble, particularly when a similar fund has been such a success for Poland?
In view of the need to avoid doing anything to make the parlous condition of the Soviet economy even worse, will the Prime Minister urgently reverse his decision to send the Chancellor of the Exchequer to Russia?

The Prime Minister: It is surprising how the right hon. Gentleman always seeks, in one form or another, to try to sell the country short—[Interruption.] I shall repeat the point that the right hon. Gentleman always seeks, one way or another, to sell the country short. I am grateful to him, at least, for some of the welcomes that he gave at the outset of his remarks for policies—many of which were initiated by this country—to strengthen the United Nations and deal with other related matters.
The right hon. Gentleman may produce his own fantasy figures on aid, but there has been a significant increase in

not only the value and nature of aid but the extent to which countries abroad appreciate the value of the aid, direct and indirect, that they receive from this country.
The right hon. Gentleman should be sufficiently well informed to know that the details of debt relief are agreed in the Paris Club and not in the G7. Had he known that—plainly, he did not—he would not have raised the points that he did. We have made the most substantive improvement in debt relief write-off for the third world—the very poorest countries—that has ever been agreed in an international forum. I should have thought that the right hon. Gentleman would welcome that warmly, at least.
I welcome the right hon. Gentleman's comments about the register of arms sales. As for other measures, it was the view of the G7 that peer pressure, through the changes in the United Nations, would have a material effect, both on whom arms were sold to and on a clear transparency of what arms were sold. Our purpose is clear: to ensure that, when a country builds up a level of armaments beyond what is needed for defensive purposes—its armaments are clearly, therefore, for offensive purposes—that becomes clear to the suppliers, who will then be subjected to the peer pressure of their colleagues in the United Nations not to increase their supplies to the country concerned.
The right hon. Gentleman's remarks on the environment were ill conceived. If he had listened to my statement a few moments ago, he would have recalled that I said that we agreed that, by the next conference, there would he a framework convention on climate change, agreement on the principles for forest conservation and a framework convention on biodiversity. There was also clear agreement among Heads of Government that, where possible, they would seek to attend the meetings in Rio next year. I certainly intend to attend the Rio conference next June as Prime Minister.
On the general agreement on tariffs and trade, there is a clear understanding within the United Kingdom and throughout the European Community that we require a reform of the common agricultural policy. It is unlikely to be achieved before the GATT agreement, but it is clear to our colleagues in GATT that an agreement is necessary and that it would require movement among member nations of the European Community. To achieve a GATT agreement requires movement among countries throughout the world—in the European Community, the Cairns Group and the United States—on agricultural and other matters. It was because of that clear understanding that the Heads of Government agreed to remain personally involved to ensure that the political impetus to reach that agreement is clearly there.
I note that the right hon. Gentleman wants to remove the common agricultural policy and keep the multi-fibre arrangement, as well as everybody else. His remarks about the world economy clearly show that he has no understanding whatsoever of how the economy works and no appreciation whatsoever that the necessary ingredients for growth are to bring down inflation and ensure that we have the right economic circumstances for sustained growth, not the sort of quick dash, leading to terminal unemployment, that the Labour party's policies would bring.
With regard to stabilisation funds for the rouble and such matters, in our discussions, we agreed with the Soviet Union to establish a continuing dialogue. Those are matters that lie—if at all—some way ahead. There is a


great deal to be done on technical assistance and other matters in the short term. Those are under way, and we have announced a small increase—in fact, a doubling—in our assistance to the Soviet Union through the know-how fund.
We also addressed the prospect of much closer co-operation at all levels of government, to ensure that the Soviet Union has the proper assistance it needs to bring its economy back into the world economy. That was the most significant shift in relationships between the industrialised, western nations and the Soviet economy that we have ever seen. It will be noted that the Opposition are unable wholeheartedly to welcome it.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall be able to call a great many right hon. and hon. Members provided that they ask brief questions, as we have not yet begun to hear the speeches from Back-Bench Members in the education debate. Therefore, I ask for brief questions, and will allow them to continue until noon, when we must return to the debate.

Sir Geoffrey Howe: Does the Prime Minister accept that the great majority of people will much admire the substance and style of the calm, competent and comprehensive conclusions arrived at by my right hon. Friends and their summit colleagues? Does he agree that people will attach a special value to the historically important agreements arrived at with President Gorbachev? They constitute an entirely appropriate achievement to build on the foundations so firmly and patiently laid by my right hon. Friend the Member for Finchley (Mrs. Thatcher). Finally, does he agree that the practical success of the 1991 London summit will most of all be judged by the seriousness of the commitment to bring the Uruguay round to a successful conclusion, which will crucially depend on the willingness of all Governments, particularly those in the European Community—notably Ministers of Agriculture—to accept conclusions that are tough as well as fair?

The Prime Minister: I am grateful to my right hon. and learned Friend for his opening remarks.
It was specifically recognised and repeatedly stated during our plenary sessions that, in order to reach a general agreement on tariffs and trade, decisions would have to be made in a number of member countries that would be uncomfortable domestically, but there was a great prize to be achieved in a successful GATT round. Therefore, those difficult decisions need to be made.
It was clear to everyone that dangers of protectionism would exist if a successful GATT round were not concluded, and that there was much in the GATT round, to all intents and purposes already agreed, which would be lost if the round were not completed during the balance of this year. Those facts were fully understood and may lead to difficult decisions having to be taken by a number of Heads of Government who put their names to that agreement.
I share my right hon. and learned Friend's view on the importance of the new relationship with the Soviet Union. I think that that view is also shared by President Gorbachev, and believe that it will lead to a substantial

improvement in and thickening of relationships between both the Soviet Union and this country, and the Soviet Union and all the countries the G7 group.

Mr. Paddy Ashdown: The Prime Minister is entitled to feel a good deal of personal satisfaction over a broadly successful and smoothly run summit. I have no doubt that he will have significantly enhanced his reputation abroad, which must be good for the country. I particularly welcome the establishment of the arms register, which I know was his initiative and about which Liberal Democrats have been enthusiastic for a number of years.
However, does the Prime Minister realise that many people will believe that the summit fell short in two crucial respects? First, its proposals to assist the developing world and the poor nations, welcome though they are, are still inadequate in the face of the massive human tragedy that is now developing. Secondly, in relation to the environment, the summit seems to have decided on promises tomorrow, when what is needed is action today.
Finally, does not the Prime Minister find an irony in the fact that, on the day after he announced a world recovery, Britain announced unemployment figures that are rising at record levels in the south, manufacturing output that is 6 per cent. lower than it was a year ago and manufacturing pay that is still rising? Does he not understand that the judgment on him will be based not on easy words about the world recovery but on the hard facts of Britain's slump, for which his actions, his Government and his policies are responsible?

The Prime Minister: I am grateful to the right hon. Gentleman for his generous opening remarks.
I think that the right hon. Gentleman may have understated what has been achieved in relation to the developing world, in which several factors are of critical importance. The first important move is the opening of free markets, so that countries in the developing world have a market for their goods. The heads of the G7 clearly recognise and acknowledge that, and demanded action.
Secondly, there is little of more importance to the developing world—the two things are related—than the successful completion of the GATT round, to which the Heads of Government also pledged themselves. Thirdly, although the details of the new debt relief must necessarily be determined in the Paris Club, nobody should understate the significance of the extent of debt relief that is to be written off for the very poorest countries in the world.
The Toronto terms of 1988, initiated by my right hon. Friend the Member for Blaby (Mr. Lawson), led the world at that time in providing assistance for the poorest countries. We have taken our current initiative to show that we take a real and direct interest in ensuring that the poorest countries are given the best possible help to lift their economies to a level of self-sufficiency. I believe that we have made real progress with that during our discussions of the past couple of days.
I share the concern of the right hon. Member for Yeovil (Mr. Ashdown) about unemployment levels in this country, but of most vital interest to the people currently employed and those not yet on the employment market—

Mr. Gerald Kaufman: What does that mean?

The Prime Minister: Let me tell the right hon. Member that the phrase "not yet on the employment market" relates to people still at school. As the shadow Foreign Secretary sits jabbering on the Opposition Front Bench, I wonder what sort of figure he would have cut in the past few days.
We are setting the framework for the future to ensure that we have a sustainable, lasting recovery in this country, with jobs that will be sustained and living standards that will improve. There is no easy way to achieve that, and the way in which we are seeking to do so is the right way.

Mr. Nigel Lawson: I congratulate my right hon. Friend on his successful chairmanship of a successful summit. The whole nation will know what to make of the petty-minded carping of the Leader of the Opposition.
In deference to your injunction, Mr. Speaker, I shall confine myself to one point. In the massive, challenging and unprecedented task of assisting the countries of central and eastern Europe to transfer from a command socialist economy to a market economy, does not my right hon. Friend agree that the most important thing that the western world can do is to assist in demonstrating that that can be done? Therefore, we must do whatever we can to help those countries that are not merely talking about economic reform, but are engaged in the tough and difficult measures of bringing it about—in particular, Czechoslovakia, Hungary and Poland.

The Prime Minister: I entirely agree with my right hon. Friend. That matter played a significant part in our discussions during the past few days. It is not simply a question of providing words of comfort to the nations of central and eastern Europe. We wish to provide them with practical aid and assistance to help them recover. In terms of the European Community, that also includes the association agreements that we are seeking to negotiate. We made it perfectly clear in our declaration that we renew our firm commitment to support reform efforts in central and eastern Europe as well as in the Soviet Union.
We also underlined our commitment further to improve their access to our markets for areas such as steel, textiles and agriculture, which will be of importance to them. We also acknowledged a secondary point, with which It think my right hon. Friend the Member for Blaby (Mr. Lawson) will agree. It is that encouraging reform in the Soviet economy will also benefit the economies of central and eastern Europe, for which, traditionally, the Soviet economy has been an important market.

Mr. Peter Shore: I deeply welcome the meeting between President Gorbachev and the G7 leaders in London and hope that, before long, the G7 will become the G8 so that the Soviet Union can play its proper part in the global management of political and economic affairs.
The Prime Minister has not satisfied the House over the crucial area of aid to the third world. He produced the Trinidad terms, they were his proposals, and we have not been told how far those terms, which have been elaborated, have been accepted by our G7 partners. If they have not been accepted, will the Government make them available to debtor countries?

The Prime Minister: The proper role of discussion in the summit is to obtain agreement on the broad principles that will determine the detailed decisions of the Paris Club.

That is what this summit has done, just as the 1988 summit did on the Toronto terms. It is the job of the Paris Club to finalise the details. On the Toronto terms, there was the same general agreement as the one we have obtained this week, and the Toronto terms were eventually agreed by the Paris Club. We agreed in principle on more generous treatment on debt for the poorest and most indebted countries, but, as I have said, the Paris Club is the proper mechanism to finalise that agreement. We shall still pursue the Trinidad terms without change in the Paris Club, and I hope that we shall achieve the desired outcome. However, the matter must be decided in that forum.

Mr. Andrew Mitchell: Will my right hon. Friend accept the genuine support and enthusiasm which greeted his announcement at G7 about the enhancement of the peace keeping role of the United Nations? Does he agree that that offers the opportunity to make progress on some of the fundamental aims and aspirations of the founding fathers of the United Nations, which for so long were thwarted by the realities of the cold war?

The Prime Minister: We certainly hope that that will be the outcome. That principle underpinned our proposals. We seek to ensure that the United Nations are in a position to prevent fires starting as well as helping to put them out at a later stage. If the United Nations can successfully undertake that role, it will be of significant advantage to the whole world.

Mr. Jim Sillars: Is the Prime Minister aware that it is perfectly possible profoundly to disagree with his Government's policies and still acknowledge the skill, diplomacy and authority with which he chaired the G7 conference? He spoke about strengthening the movement for freedom and democracy. In his discussions with President Gorbachev, did he raise the question of freedom and democracy for the Baltic states and the right to self-determination and independence?

The Prime Minister: I am grateful to the hon. Gentleman. My discussions with President Gorbachev were wide ranging. We discussed the Baltic states and a range of other matters within the Soviet Union. I am sure that the hon. Gentleman would not expect me to respond for President Gorbachev, but I assure him that we discussed that matter.

Sir Bernard Braine: I, too, warmly congratulate my right hon. Friend on the evident skill with which he presided at this historic conference. A major problem facing the G7 leaders was the difficulty in arriving at a proper world trading pattern. I hope that my right hon. Friend will not hesitate to invite the G7 leaders—say, at the end of the year—to come back to London to resolve the problems in GATT.

The Prime Minister: In the light of the commitment given by the Heads of Government, I very much expect that such a meeting would not be necessary. However, the option for such a meeting clearly exists, because everyone recognised the importance of concluding the round this year.

Ms. Diane Abbott: Did the summit discuss the very real link between the debt crisis and the drugs crisis? Those countries whose economies are most crippled by the


repayment of debt, such as Colombia, are greatly involved in the drugs issue. The Prime Minister mentioned the poorest countries. What about the so-called middle-income debtors, such as south America, Nigeria and the Caribbean? Is there no question of debt reduction for them?

The Prime Minister: The hon. Lady's points are important, but it was not possible in the time available to discuss all the structuring of debt between middle-income, the lower-income and the very poorest countries. The matter has been discussed on previous occasions, and for that reason we concentrated our discussions on the very poorest countries, with the outcome that I have set out. The hon. Lady will know that these matters are subject to continuing discussion bilaterally, in the European Community and in the Paris Club of creditors. The hon. Lady asked about drugs and debt. We did not discuss any linkage between them, but, as I said in my statement, both were discussed.

Mr. David Howell: My right hon. Friend presided over and guided this highly constructive summit with skill, vision and patience, as is recognised in all responsible parts of the House. In the context of the question by my right hon. Friend the Member for Blaby (Mr. Lawson), does the Prime Minister agree that, while we all want to see the Soviet Union move without violence towards a more diffuse, decentralised new political structure, the first priority must be to see the new young democracies of eastern Europe brought to freedom and prosperity? As he rightly says, that requires not merely more open trade with Europe but the re-creation of a trading system within eastern Europe through a new payments clearing system, so that countries can trade with one another and begin to pick up the bits and advance towards prosperity.

The Prime Minister: Yes, I agree with my right hon. Friend. I set out earlier some of the practical measures that we think are necessary to help the countries of central and eastern Europe. I would not in any way underestimate the importance of the association agreements with the European Community and the prospect that at some stage these countries will feel inclined and be able to join the EC. That is clearly some way ahead, but it is a goal which we should leave open for them and one that I hope they will eventually reach.

Mr. Jack Ashley: Is it not ironic that those European countries that have been pressing President Gorbachev to adopt a market economy, notably France and Germany, are the very ones which are distorting the world market economy by their continuing support for the common agricultural policy, thereby damaging Britain and devastating developing countries? Does this not indicate the need for radical change, not only in the Soviet Union but in the EC? What sort of intervention does the Prime Minister propose, in view of the fact that we have had promises of action this year from European Governments and have had such promises before?

The Prime Minister: The right hon. Gentleman is entirely right about the need for reform of agriculture, particularly in the European Community. The

Government have taken that position for some time, and we have been forward in the Community in consistently pushing the need for reform of the common agricultural policy. There have now been some proposals, and we welcome the fact that there is now acknowledgment throughout the Community of the necessity for reform of the common agricultural policy. We should not fool ourselves that that will be speedily or easily achieved. There are many distinct national interests, but a great advance has been made with the acceptance of the necessity for reform. We must now get down to examining the details and turn that objective into reality.

Mr. Nigel Forman: Does my right hon. Friend agree that, for many years, the Government have made a constructive contribution to measures intended to improve and protect the environment in this country and globally? Does he recognise that I and many of my hon. Friends very much look forward to his going to the Rio conference next year to lead the British delegation? Does he further realise that the contribution by the Leader of the Opposition on this matter, as on many others, shows that he would be wise to follow the adage that he should quit while he is behind?

The Prime Minister: It is striking how environmental factors now appear at every point of our economic discussions, on economic policy, trade, energy, relations with European partners, relations with eastern Europe and aid. That fits entirely with our environmental policy-making. It may have been the case some years ago that only a few far-sighted people realised the importance of the environment, but that is no longer the case. It is recognised as central to our futures, as something that needs careful consideration in every aspect of policy-making.

Mr. Tony Banks: Why was not more done to assist Mr. Gorbachev in the changes that he is trying to bring about in the Soviet Union? It is all very well saying that financial resources will flow after the changes have been achieved, but some say that, unless the financial resources get there, the changes will not be achieved. If Mr. Gorbachev fails, we shall fail throughout the world. The Soviet Union breaking up into chaos will imperil all of us. Will the Prime Minister, rather than talking in general terms about moving from a command economy to a market economy, say specifically what changes Mr. Gorbachev will have to achieve before he gets the necessary economic resources, along the lines of a Marshall plan, so that he can go from success to success?

The Prime Minister: The hon. Gentleman might have had his tongue in his cheek for part of that question. The solution to the problems of the Soviet Union will essentially have to come from within the Soviet Union. That is recognised by President Gorbachev and other politicians in the Soviet Union, and acknowledged by the countries outside. What we can and should do is assist him in enabling economic reform to take place, and the sort of assistance that he needs is available in joint venture co-operatives—these were widely discussed in our meeting —technical assistance, and the trade and open market flows that I mentioned earlier.
We are at an early stage of this relationship. The expertise of the four financial institutions will now be available to Mr. Gorbachev, and the associate status


relationship with the International Monetary Fund will be of critical importance. I believe that this was a significant advancement for the Soviet Union. On the basis of my conversations with Mr. Gorvachev, I can say that that is the President's view as well.

Sir Peter Blaker: I pay tribute to the skill and authority with which my right hon. Friend conducted these meetings, and I heartily endorse what he said about the Soviet Union. While we all hope that the arrangements made with it will mark the start of a long and fruitful relationship with that country, is it not also clear that, in spite of the collapse of socialism there, it could do a great deal more to attract inward investment and aid from the west? For example, it could have real democracy, a real market economy and, not least, a framework of law within which western business men could operate.

The Prime Minister: My right hon. Friend is right in each of those remarks. It is my understanding that that point is now acknowledged and understood by those in the Soviet Government who are seeking to put in place the mechanisms to encourage inward investment, in terms both of direct ownership and joint co-operative ventures.

Mr. Alan Williams: I welcome the register of arms sales, although I am pessimistic about enforcement of it. Will that register extend to the technology that would enable countries to produce their own advances on mass destruction weapons?

The Prime Minister: That is not yet clear. I agree with the right hon. Gentleman that that is one of the matters that deserve careful study. It will have to have that careful study at the United Nations General Assembly this autumn.

Mr. Michael Knowles: Will my right hon. Friend confirm that access to international financial institutions is absolutely vital to the future of South Africa and consequently to the future of Africa as a whole? What further progress will he be able to make with his colleagues on this front?

The Prime Minister: I share my hon. Friend's view that access to international financial institutions is vital to South africa. A particular problem is that, for some time, it has had nil economic growth and 3 per cent. population growth, so it needs assistance and access to international institutions and the inward investment that is the surest sign that it will be able to improve the living standards of its poorest citizens.

Mr. Norman Hogg: On the point made by my hon. Friend the Member for Newham, North-West (Mr. Banks), the Prime Minister will recall that, at the conclusion of the second world war, Marshall aid was made available to the Soviet Union, but was rejected by Stalin's Government. Does he not understand that, by failing to underpin the technical know-how and other resources that the G7 is proposing with the financial assistance that the Soviet Union believes is necessary, the G7 is hindering the pace of reforms that it is looking for inside the Soviet Union and which can only be for the good of that country?

The Prime Minister: With respect, I believe that the hon. Gentleman is wrong. We cannot impose or insist

upon those reforms in the way that he is suggesting, externally. We can only encourage the Soviet Union and provide the information, the technical expertise, the access to markets and the advice that will enable it to do the work that only it can do for itself to bring its economy up to the standards that it would like and to the nature of western liberal democracy. It cannot be done externally.

Mr. Terence L. Higgins: Does not the Prime Minister's success reflect an extraordinary grasp of the entire range of political and economic issues? I particularly appreciate the new and enthusiastic support that he is giving the United Nations as an organisation. That should enable it increasingly to fulfil the good intentions of its founders.
Is not agriculture the central issue in trade negotiations? Is it not absurd, not only in Europe but in the United States and Japan, to go on giving way to the pressure of producer interests, rather than putting the interests of consumers and the countries as a whole in the forefront of the argument? Will my right hon. Friend make sure that the Heads of Government get to grips with Agriculture Ministers and sort them out?

The Prime Minister: I share my right hon. Friend's view of the primary importance of consumers. That means that there will have to be robust discussions and negotiations in the GATT round to achieve a settlement later this year. There must be a settlement, and that has been acknowledged. I am grateful for my right hon. Friend's remarks about the United Nations. It can be a great force for good. It has not always lived up to what its founders hoped for it. It is now in a better position to begin to live up to its founders' aspirations.

Mr. James Lamond: Why is it that anything other than the most sycophantic praise for the Prime Minister's efforts gets him jumping to his feet bawling and shouting about selling the country short? Surely his position is not so insecure that we cannot ask probing questions?
I shall ask him about the negotiations on GATT and the related multi-fibre arrangement, which he dismissed in a rather off-hand way. This arrangement, which ends at the end of July, is essential to protect many tens of thousands, if not hundreds of thousands of jobs in textiles, including many in my constituency. Employers and employees alike have been writing to Members of Parliament, on both sides of the House, pointing out the danger that this agreement will run out with nothing to take its place. This is not a restrictive agreement. It allows expansion of exports into this country, but in a controlled way. It is essential if our textile industry is to survive.

The Prime Minister: Of course we have to look at the MFA, but that was not a subject of discussion among the G7 on this occasion. The GATT Uruguay round spreads across a whole range of trading matters and is a much bigger matter than the MFA, although I acknowledge the latter's importance. For that reason, we concentrated our discussions on the GATT round as a whole.
At these meetings, there is a limited amount of time and a vast range of matters to be discussed. On this occasion, we stretched the agenda to the maximum possible and reached constructive agreements. On that account, we can point to the substantive outcome of the summit. I have a


question for the hon. Gentleman or anyone else. On what previous occasion were so many substantive agreements reached at a summit?

Sir Peter Tapsell: Did not the exceptionally warm tributes that the other G7 leaders paid to the chairmanship of my right hon. Friend confirm what he has just said? Does my right hon. Friend accept that most people will think that the G7 leaders were right not to give large-scale financial assistance to the Soviet Union at this stage, although one hopes that the special relationship with the International Monetary Fund will help the Soviet Union to get into a position in which it can make good use of such assistance in due course? For instance, did the Prime Minister of Japan describe to my right hon. Friend the way in which the Export-Import bank of Japan gives help to Japanese companies that invest in Russia and the Soviet Union? Could consideration be given to the British Government backing British firms that will help in the regeneration of the Soviet economy?

The Prime Minister: I am grateful to my hon. Friend for his earlier remarks. We shall be examining in the discussions that will continue in future the extent to which we may be able to improve the trade and investment flow between the United Kingdom and the Soviet Union, so the matters to which my hon. Friend points, among others, will certainly be the subject of discussion within the Government.

Mr. Keith Vaz: Did the summit leaders express concern at the world banking order and the decision of the Bank of England, supported by the Prime Minister at his meeting with the governor on 28 June, to close the Bank of Credit and Commerce International? The Prime Minister says that it was a successful summit. Does he agree that the headlines in the newspapers were a deep embarrassment to him during the summit? Does he agree also that to help the reputation—

Mr. Speaker: Order. The hon. Gentleman's question is wide of the statement. Questions must be directed to the statement.

Mr. Vaz: Does the Prime Minister agree that the matter can best be sorted out by a public inquiry?

The Prime Minister: That question has no conceivable relevance to the summit.

Sir Nicholas Bonsor: There is no doubt that the G7 meeting will provide the framework for a safer and better world, especially because of the way in which the Soviet Union's leadership has been involved. Does my right hon. Friend agree, however, that it would be folly for the west to pour money into the Soviet Union while it is spending so much of its gross domestic produce on defence?
Is it not right that the Soviet Union has launched six Typhoon class submarines within the past six months and that it has hidden, although we have spotted them by means of our satellites, quite a lot of the machinery, weapons and equipment that it says that it has destroyed? Is it not right that the President of the Soviet Union has yet to control his military conservative colleagues in a way that will lead the west to feel secure under his leadership?

The Prime Minister: We discussed particularly the prospects for defence conversion, which I think bears directly upon the pertinent points that my hon. Friend makes. I think that he is correct to say that now is not the time for large-scale financial assistance.

Mr. Robert N. Wareing: Did the Prime Minister caution the Soviet leader against too mad a dash to an untrammelled market economy without any planning or controls? Did he warn him that that could lead a country to lose one third of its manufacturing industry in 10 years? Did he explain that it could lead to financial scandals such as the BCCI? Did he ask Mr. Gorbachev's advice on how Moscow, unlike London, has been able to avoid having a cardboard city?

The Prime Minister: President Gorbachev is very keen to move towards a market economy, but then these days the Soviet Union leadership is to the right of the Labour party.

Mr. Anthony Nelson: I congratulate my right hon. Friend on the great statesmanship that he displayed. Does he agree that a real test of whether the worthy declarations of G7 will be translated into solid achievements will be the international trade discussions? Does he agree also that it is essential that many of us—even those who represent agricultural constituencies—will have to face some difficult decisions if we are to get a tougher package of proposals on guaranteed price and compensation payment reductions to break the stalemate on the Uruguay round and bring about an essential revival of talks on the GATT?

The Prime Minister: My hon. Friend is absolutely right about that. We ought not to overlook, however, some of the difficulties there will be in reaching agreements on services and intellectual property and on other matters. There are a number of areas in which there are difficult decisions to be taken, both for this country and elsewhere. I believe that it is an accurate judgment to say that agricultural movement is the cornerstone of a successful GATT outcome.

Mr. Tam Dalyell: How can any British Prime Minister credibly go to Brazil to talk about the conservation of forests without doing something to save what remains of our own ancient Caledonian forest, and in particular rescuing Mar Lodge? In the light of the pleas of UNICEF—I gave notice—

Mr. Speaker: Order. We have heard a lot about Mar Lodge.

The Prime Minister: I am grateful to the hon. Member for Linlithgow (Mr. Dalyell) for giving notice that he would raise the issue of Mar Lodge and the estate. It was typically generous of the hon. Gentleman to do so, and I am most grateful to him. We have made it clear that we shall look to the conservation agencies in Scotland to work with the future owner of the estate, whoever he turns out to be, to ensure that the special qualities of the estate are preserved and enhanced for the benefit of this generation and future generations.

Sir Geoffrey Johnson Smith: Will my right hon. Friend tell us a little more about the support given to his initiative to set up a United Nations arms sales register?


Has not the time come for the United Nations secretariat, to maintain the momentum of the initiative, to establish more effective verification procedures?

The Prime Minister: Yes, I share my hon. Friend's view on that. As to the depth of support, we have complete support from the European Community, which was obtained previously. Indeed, the European Community will join us in tabling a motion at the United Nations General Assembly later this year. I now know that that motion will have the support of all members of Group of Seven.

Mr. Kate Hoey: I welcome the moves to strengthen the United Nations. Can the Prime Minister say whether there was any discussion about hew the United Nations could work towards a solution for the Shia population in southern Iraq, which, as I said yesterday, is out of sight of the cameras and in respect of which the United Nations seems to be doing nothing? Was there any suggestion of an initiative of the sort that we organised for the Kurds?

The Prime Minister: That matter was not discussed at the G7 summit. The hon. Lady points accurately to the purpose behind one of the changes that we are suggesting to the United Nations, which is that the United Nations in future should look towards identifying problems and damping them down, rather than being an organisation that responds to problems after they have arisen and have achieved an international dimension. It is precisely to meet an attempt to prevent the sort of problem to which the hon. Lady referred that we are seeking the reforms that I have outlined within the United Nations.

Sir Peter Emery: I congratulate my right hon. Friend on his outstanding leadership, and ask him to accept the thanks of many hon. Members for the way that he brought President Gorbachev on to the Terrace of this place in a way that had never been done before, and introduced him to many hon. Members. I hope that that example will be taken up and followed in future.
Will my right hon. Friend stress the need for our industries, and western industries generally, to go outside Moscow into the regions, where, with the break-up of centralisation, there is much to be done on the technological side to deal with the vast problem of transportation across the whole of the USSR? Very few people understand the difficulties that now exist.

The Prime Minister: I think that my hon. Friend is entirely right in his remarks about the Soviet Union, and entirely correct to point out that many business and other opportunities will be found far outside Moscow arid the other main cities that will none the less be well worth examining. I am grateful to him for welcoming the fact that President Gorbachev was able to meet a number of hon. Members on the Terrace last evening. I thought it would be appropriate for President Gorbachev to do that. I was particularly pleased that I was able to introduce him to the hon. Member for Bolsover (Mr. Skinner). I thought that it was nice for President Gorbachev to meet one of the few socialists in Britain who has not let his membership lapse.

Mr. Dennis Skinner: In between discussing sending the Chancellor of the Exchequer to Russia to save its small businesses—while small businesses in Britain are

going down the pan—and discussing the budget deficits of other countries—while our public sector borrowing requirement in the first three months of this year reached £6·9 billion—did the Prime Minister have a word with George Bush about drug-dealing banks? Did he discuss —I would find it unbelievable if he did not—the BCCI and the need for a public inquiry to expose the Government's squalid cover-up of their involvement in the bank and the fact that they have been passing letters to one another—[Interruption.]

Mr. Speaker: Order.

The Prime Minister: If there is a top, we can rely on the hon. Member for Bolsover to go well over it. It is odd of the hon. Gentleman to raise the question of borrowing, when his party has £35 billion-worth of pledges that will raise borrowing to massive heights.

Several hon. Members: rose—

Mr. Speaker: Order. I heard one hon. Member say "penalty". I intend, exceptionally, to extend questions by five minutes, but then we must move on.

Mr. Phillip Oppenheim: With the world moving towards freer markets and more open economies, how much respect would the British leader have received if he had gone to the summit with policies for increasing interference in the British economy, renationalisation, lax monetary arrangements, and letting public spending rip, and with policies that were so contradictory that, while asking for reform of the common agricultural policy, he was not asking for reform of the multi-fibre arrangement, despite the enormous damage that that does to developing countries?

The Prime Minister: None, Sir.

Mr. David Winnick: Despite all the lavish praise that the Prime Minister has received from his supporters, including the Tory press, is he aware that, when we return to our constituencies later today—where there are Tory as well as Labour supporters—we will be asked when the recession and the misery will end? If the Prime Minister is as confident of his position as apparently he was last night—

Mr. Speaker: Order. Those points have nothing to do with the statement.

Mr. Winnick: They are as relevant as the points of the hon. Member for Amber Valley(Mr.Oppenheim).

The Prime Minister: With your agreement, Mr. Speaker, I will tell the hon. Gentleman what I have already told the House many times—that I am confident that, in the second half of this year, the economy will begin to take off again. There is clear evidence from around the world that the world is coming out of recession. The United States of America is coming out of recession, the slowdown in France has begun to stop, Germany is still helping to pull the European Community out of recession, and Japan is still booming. There are far too many signs for anyone to doubt that, in the second half of this year, there will be a great improvement and we will be moving out of recession.

Mr. Ivan Lawrence: Is my right hon. Friend aware that more significant than the congratulations that he has received from his supporters in the House are the


plaudits that he has received from his fellow world leaders and the world's press? Do they not fully justify the 25-point lead that he has over the small and mean-minded Leader of the Opposition in the opinion polls?
Is my right hon. Friend aware that, quite apart from the economic ramifications of the splendid conference, the most important single long-term benefit has been the boost that it has given to the strengthening of the United Nations, with its powers to prevent wars, to stop wars and to deal with the misery that follows wars and national disasters?

The Prime Minister: I agree with my hon. and learned Friend. It is important that the United Nations retains the enhanced authority that it rightly earned during the Gulf conflict. Our proposals, together with those suggested by others, which have been enshrined in the G7 declarations, will go a long way towards ensuring that the United Nations becomes a much more potent force for good than it has sometimes been in the past.

Mr. D. N. Campbell-Savours: On the question of preventive measures by the United Nations, to which the Prime Minister alluded, was there any discussion of the implementation of United Nations resolution 688 on the repression in Iraq? In view of the clear breaches of that resolution on Wednesday in Arbil when four people were killed, and the use of tanks against the civilian population in Salumaniya, was it the general view of the leaders at the summit that some action should be taken either by the rapid deployment force in southern Turkey or by American marine deployments in the eastern Mediterranean?

The Prime Minister: As the hon. Gentleman knows, those are matters for the United Nations. We made it clear in our discussions during the past few days that we stand by United Nations resolutions 687 and 688. They are very important, not only in the aspect to which the hon. Gentleman referred, but in view of the information that has lately come into our hands that Iraq still retains the capability to produce nuclear weapons—

Mr. Dalyell: Is the right hon. Gentleman sure of that?

The Prime Minister: Yes, we are sure of that, and it is a matter of great importance. We have made it clear to Iraq, as have our partners, that Iraq must remove those capabilities or we will take action to remove them.

Mr. Tim Rathbone: I wish to add greater accent to the question asked by my right hon. Friends the Members for Blaby (Mr. Lawson) and for Guildford (Mr. Howell) about the help being given to developing nations in eastern and central Europe. Many still worry about the level of aid in both know-how assistance and funding. I hope that the G7 summit will lead to increases, where those are necessary.

The Prime Minister: I am not sure that I can add to my earlier answer to my right hon. Friend the Member for Blaby (Mr. Lawson), but it was acknowledged at the G7 summit that, in our concern about the Soviet Union, there must be no question of overlooking the imminent and urgent concerns of other central and eastern European

nations. That was the view of the G7 summit and, by our actions within the European Community, it is clear that it is also the view of the European Community.

Several hon. Members: rose—

Mr. Speaker: Order. I am sorry that I have been unable to call all hon. Members, but I give an undertaking that, on the next occasion that the Prime Minister is at the Dispatch Box to make a statement, even though it may be on another subject, I shall give some precedence to those hon. Members.

Mr. Max Madden: On a point of order, Mr. Speaker.

Mr. Speaker: What possible point of order could arise from that?

Mr. Madden: When colleagues sought to raise the matter of BCCI, Mr. Speaker, you rightly said that it was a little wide of the statement. Have you had any indications from the Prime Minister that he intends to make a statement about BCCI on Monday? It is clear that the longer that the Government and the Prime Minister maintain silence on that very serious matter, the more suspicion will mount that the Government's failure to act was dictated by political expediency rather than by any other matter.

Mr. Speaker: I have not had any such indication, but I do not underestimate the importance of what the hon. Gentleman has said. I am sure that it will have been heard.

Mr. Stuart Bell: Further to that point of order, Mr. Speaker. It is a genuine point of order, which also follows upon an earlier point of order by my hon. Friend the Member for Bolsover (Mr. Skinner). We are aware that the Secretary of State for Employment received a letter stating that BCCI had lost $600 million of loans and $150 million across the exchanges, and that there had been a charge that the bank was corrupt and another charge of nepotism, and that a doubt was cast upon the bank's auditors. The Secretary of State simply passed that letter on to the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who at the time—

Mr. Speaker: Order. Those are matters that could rightly be exposed, if there is any substance to them, in the debate to be held on Monday.

Mr. Bell: Further to that—

Mr. Speaker: Order. These are matters not for me, but for the Government. They are matters for Monday, not today.

Mr. Bell: With respect, Mr. Speaker, this is a position we face time and again in the House. This legislature is here to hold the Executive to account—

Mr. Speaker: Order. The hon. Member is taking debating time from his own colleagues, which is not fair. There will be other opportunities to raise that matter. What is the point of order for me?

Mr. Bell: Has the Secretary of State for Employment, who received the letter and sent it on to the Department of Trade and Industry, made a request to make a statement


at 2.30 pm? Earlier this week, the Leader of the House said that Opposition requests for statements would be taken on account—

Mr. Speaker: Order. I have not heard that there is to be a statement at 2.30 pm, but it is an important matter and I am sure that the hon. Member's remarks were heard by those on the Government Front Bench.

Schools

Question again proposed, That this House do now adjourn.

Mr. Speaker: May I point out to Back Benchers who hope to be called that although I did not earlier limit speeches to 10 minutes, and cannot do so now under the Standing Order, perhaps they will bear such a limit in mind, so that all of them may be called.

Mr. Fatchett: It is a strange experience to have a 70-minute break, but I reassure right hon. and hon. Members in all parts of the House that I am almost two thirds or three quarters through my speech.

Mr. Pawsey: Is that meant to be reassuring?

Mr. Fatchett: Yes, because it means that I shall not take much more time.
It may be helpful if I summarise my earlier points. I said that any deterioration in education standards over the past 12 years is the Government's responsibility and I criticised them for their failure to provide nursery education and to give our young people the start in life that they would enjoy in other European countries. I criticised the Government also for their managerial incompetence and inconsistency and for their politicisation of education. I criticised them for failing to invest in our education system.
As we reached the enforced half time, I spoke of the double standards of Conservative Members in imposing their ideology on the maintained sector, but sending their children to private schools.
I turn to another area of criticism. I sought information about the funding level of city technology colleges, but still await some parliamentary answers. The Government have not denied that there is a massive differential between the funding of CTCs and adjoining schools. For example, the Nottingham CTC grant represents 71 per cent. more than the normal funding level for Nottinghamshire's local education authority; for Kingshurst CTC in Solihull, the figure is 24 per cent. more; for Middlesbrough, 60 per cent. more than other schools in Cleveland; Gateshead, 270 per cent. more; and Bradford, 250 per cent. more. We know also that the Harris CTC is funded on the basis that it has 1,100 students, when it really has fewer than 800.
The Minister excuses such differentials on two grounds. He argues that CTCs are new schools and therefore should benefit from start-up money. That is not the case with the maintained sector. In an earlier intervention, I asked the Minister to name one maintained school that would benefit in that way under local management, but he was unable to do so. The Government's argument applies only to CTCs, not to other schools.
The Minister's second argument, which was equally erroneous, was that CTCs are funded more expensively because of their emphasis on technology. That shows the Government's double standards, because if it is right that CTC students should have access to the best in technology—and they should—the same facilities should be made available to all children.
When the Government speak about choice, they mean choice for a few. They have no view on how to raise standards across the whole education system. For 12 years,


they have been more interested in ideological experimentation and in the education of the few than about the majority of children.
Overall standards must be improved in each and every school throughout the country and we do not accept that some market mechanism will make that possible. Under the market system, some schools will improve, but others will deteriorate and no overall increase in standards will result.
The Government's obsession with the right to choose for a few means that the entitlement of all parents to high-quality education for their children is ignored. The Conservative party is the party of partial choice for a small group of parents. The Labour party is the party of rights and entitlement for all parents, because we believe in improving standards across the system.
It is clear from this and previous debates that only one party is serious about raising standards for all children and that is the Labour party. The public trust Labour because only our party has policies for improving standards and has articulated them. The public know that under a Labour Government, there will be an expansion of the good start in early education through higher investment in nursery education. They know that Labour will improve education performance school by school, local authority by local authority, through its powerful, independent, much-acclaimed and non-political education standards commission.
Labour has an approach to managing the education system, but the Government have abdicated their responsibilities. Parents recognise that difference and look to Labour to improve overall standards. Parents know also that Labour will open up participation in post-16 education and that it has ambitions for our young people which will put them in line with those in the rest of western Europe.
The Minister knocked Labour's ambitious targets, but our counterparts in western Europe would view them only as realistic, everyday and matter of fact. It tells us much about the Minister and the Government's record that the hon. Gentleman saw fit to mock Labour's ambition to match the targets achieved by our European neighbours.
Right hon. and hon. Members in all parts of the House agree that education is the way to build for the future and to provide skills and knowledge to ensure individual achievement and the country's economic success. For the first time in our history, personal satisfaction and economic success through education are converging. The country needs a Government who will seize on that opportunity and build for the future. For Labour, education is not just the big idea in opposition, but will be its big achievement in government.

Sir Rhodes Boyson: I am mindful of the time and will try to keep to the guidelines issued by Mr. Speaker.
Let me congratulate the education team, from the Secretary of State downwards. Over the past 12 years, the Government have tried to get to grips with education problems; yet, somehow, the education establishment has

constantly eluded us. For the first time, we have now brutally taken the whip hand to ensure that what we want to be done will indeed be done.
As a headmaster—and, indeed, since ceasing to be one —I have witnessed the decline in educational standards that began in about 1965. That decline cannot be blamed on either teachers or parents; it was caused by two other factors. The first could be described as the intellectual climate, in which "trendies" insisted on following every fashion, including the discovery method. The second is Labour's obsession—mentioned by the hon. Member for Leeds, Central (Mr. Fatchett)—with the egalitarian comprehensive system. I should add that inspectors in university departments and teacher training colleges were largely responsible for destroying the primary schools. We shall never get education to work properly until those two problems are dealt with.
Teachers in the classrooms did not want the new methods; they wanted to go on teaching. Parents did not want them, either: they wanted their children to be taught. Never has there been such a betrayal of both parents and teachers as in the past 20 years.
The first thing that should be taught in infant and junior schools is discipline. Unless children are trained to sit down and work, nothing will be achieved. The hon. Member for Norwood (Mr. Fraser) may laugh—

Mr. Fraser: rose—

Sir Rhodes Boyson: No, I will not give way to the hon. Gentleman. If he wishes to indulge in a little laughter session, that is his privilege, but I do not intend to join in.

Mr. Fraser: I have to agree with what the right hon. Gentleman is saying.

Sir Rhodes Boyson: That worries me rather.
The discovery method is the worst form of teaching that we have ever seen. When it is introduced in primary schools, standards fall. Teachers are paid to teach—to plug children into arithmetic and English and to equip them with a body of knowledge. Children do not acquire such knowledge by accident. Schools are, in a sense, artificial institutions: children will not go to school because they want to. They would prefer to play outside. Nowadays, some schoolrooms are really indoor football pitches.
All these developments have undermined the confidence of teachers. They have now been told that they must not actually teach; they must simply place around the room such items as Euclid's theorems, Faraday's electromagnetic laws and the use of the subjunctive and the children will discover them of their own accord.

Mr. Harry Greenway: Will my right hon. Friend give way?

Sir Rhodes Boyson: No, I will not—much as I respect my hon. Friend, who once taught at a school where I was headmaster. I wish to allow others time to speak.
The continuance of civilisation depends on men and women standing on the shoulders of those who have lived before. The "discovery method", however, rejects that principle, relying on induction and, in many instances, destroying what had been achieved in infant and junior schools. At the same time, there was a move to the "look and say" method and "real books" and away from phonics, which is the method by which most children learn


to read. Ten per cent. of teachers can teach by any method if they are left alone; 10 per cent. cannot and must be got rid of. The remaining 80 per cent. need a method and that is where phonics came in.
In the early 1960s, when I was a headmaster in Lancashire, I supported early experiments in comprehensive schools. I do not believe that an entire system should be turned around until it has been tried. Before long, however, I found that the Labour party and certain other organisations were trying to achieve salvation by means of faith rather than works. The Labour party got shot of its previous policy—as it often does: it has recently been forced to support the free market because of its shortage of policies. Looking round for a replacement policy, it became wedded to the concept of the egalitarian comprehensive school and destroyed 400 good technical schools. It destroyed hundreds of grammar schools and thousands of secondary moderns. I know: I taught for 10 years in secondary moderns and also did some remedial work. It will be a long time before the situation is remedied, even with the help of the city technology colleges.
What have we done over the past 12 years? We seem to be getting to grips with the problems better than we were before; again, I offer my congratulations to the present ministerial team. I approve of the tests for children aged seven, 11 and 14. I also believe that diagnostic tests should be applied automatically and that any teacher who does not apply them should be out of a job. The new tests should establish whether schools are doing their job and, if they are not, their staff should be replaced. Children's chances, especially in the inner cities, are made or 'broken by what they are taught at school. I know that from my experience of teaching in inner cities and downtown textile areas.
As soon as we presented our proposals, the educational establishment set up committees on which ordinary teachers were hardly mentioned or seen. They built a massive structure, at great expense. Once again, the left wing damaged what had been achieved. I am glad to hear my right hon. Friend the Prime Minister and my right hon. and learned Friend the Secretary of State for Education and Science talk of returning to pencil-and-paper tests which can easily be applied within the curriculum without distorting it.
The Government have also done a good deal to enhance parental choice. My hon. Friend the Minister mentioned the assisted places scheme, which has benefited 50,000 children. The Labour party would destroy that, too: Labour has learnt nothing from what has already happened. The introduction of the CTCs and grant-maintained status has also increased parental choice. I want a system in which all parents can choose from a variety of schools and can even choose among mini-schools within schools.
We must do two more things. First, we must openly return to some system of selection at the ages of 11, 12, or 14. We will never return to the grammar schools as they were, just as the Roman Church was never the same after the reformation and the counter-reformation. One can never go back, but every other country with which we compete has some form of selection, according to interest and ability, at those ages.
We have been hearing about the G7 summit. Woe betide us if the Russians and eastern Europeans, with their excellent education system, ever go to a genuine free

market economy. If we do not get our education right, they will overtake us. On the whole, education is better in Russia and eastern Europe than it is here, despite the improvements that we are trying to make. I recently met the headmaster of a school in Russia which recruits its 200 pupils from a recruitment field of 7 million. I am not advocating that; I am merely mentioning it. It is a physics and mathematics school. The Russians did not get to outer space by accident. They were able to do it because they have a sound educational system. It is a good thing for us, in competitive terms, that they had a bad economic system. That is why they did not do even better.
Russia has a whole series of specialist schools, including trade schools. Thirty five per cent. of children in Russia go to trade schools where, from the age of 14, they are trained for trades, and can study 1,150 crafts. Germany has three types of school. Sweden and the Netherlands have different types of school, as does Japan. Only the Labour and Liberal parties—I regularly pray for their salvation—have swallowed the concept of the egalitarian comprehensive school and teaching in mixed-ability schools, which is the most uneconomic teaching system ever discovered by man. It is like going back to hand-loom weaving. Previously, we brought children with the same interests and abilities together under skilled teachers. The Government must accept different forms of selection so that each child is taken to the limit of his ability.
We must raise the status of teachers. The discovery method degraded and denigrated teachers. They were almost unnecessary—just chairmen or people wandering round. They must be teachers again and must be paid as such and the professional factor must apply. I therefore welcome what is being done about teachers' salaries.
It is particularly important that primary and infant school teachers are well trained. I would not go so far in respect of secondary teachers. One can put teachers into a secondary school and give them a year's induction and one knows almost immediately whether they will make teachers or not. But the skills required for junior and infant school teaching require careful training.
I believe that the 1,265-hour contract should be torn up. Just when industry was buying out the rule book so that people finished the job, we gave the teachers a rule book. There are trendies in the Department, as there are in every educational establishment. I hope that there are fewer of them now. They may be very nice people. No doubt there is nothing wrong with them—they do not beat their wives or eat their grandmothers—but they have been partly brainwashed. When I was at the Department, they tried to get the proposal through and, if I did nothing else, I stopped it then. Teachers should be professional workers who finish the job. If that means working until 7 pm or 8 pm, I would expect no less of my teachers or myself. But if the examinations are over and teachers want two days off in the summer, they should be able to take that time off. There is no need to add everything up and say, "Where are you on this?" That represents the proletarianisation of the whole profession.
I welcome the fact that the Prime Minister, the Secretary of State and Ministers are to keep A-levels, which are an important benchmark. We want to build up a similar assessment at age 18 on the technical, vocational and trade side, and one which is accorded equal respect. They have such tests in other countries and we should follow their example. We are moving towards that, but for goodness sake let us keep A-levels in the meantime.
I was never an enthusiast for the GCSE and I am still not, but I accept that it is here and that we must work with it. I am glad that we are moving back to examination work rather than project work because project work is against the interests of the inner-city child and of children from deprived homes. In a home with books, the whole family does the project. I have suggested that the whole family —including grandmother—should go up for the certificate and not just the pupil concerned. But in a home without books, a pupil is disadvantaged by project work. So many things done by the trendies handicap those from deprived homes.
I should like another GSCE board to be established on which there are no educational experts, just a random sample of parents and employers. Let that board draw up a syllabus to compete with those produced by the educational establishment and let schools be able to choose a totally new board from outside.
I am in favour of grant-maintained schools. I make a gentle suggestion to my hon. Friend the Minister. In our general election manifesto we should say that we will make all schools grant maintained. That would be one of the most popular actions that we could take. It would be good for parents and would help us to be re-elected. We should look after parents and pupils. For the good of this country, we should be re-elected.

Mr. David Bellotti: Many hon. Members wish to speak in this important debate. Those of us on the Opposition Benches may say that the Government have got many things wrong, but we cannot accuse them of not doing anything in recent years. The education service has experienced regulation after regulation, Bill after Bill, and coercion after coercion until those involved, whether teachers, parents or pupils, are beginning to wonder what is going on around them.
The Minister began his speech by talking about city technology colleges, and I wish to do so as well. When the Government first announced CTCs, we were told that eventually there would be hundreds of them, but the Government decided that they had to scale down their ideas—[Interruption.] I saw a statement to that effect by a Minister. Eventually, there was another statement by a Minister who said, "No, we must stop at 20." The Government stopped at an unlucky 13.
The Minister took us on a tour of one or two of the more successful CTCs, from the Government's perspective. In Brighton a massive amount of Government money has been lost and tremendous disruption has been caused to the local education authority by the Government's proposal to have a CTC in Brighton which never eventuated. Private individuals put Government money into their pockets and then left. The Government and the LEA lost money. At that time, the LEA had a plan for secondary education in part of Brighton. Because of the Government's desire to have a CTC, the church involved in a church-aided proposal for a school in the area does not wish to proceed. The LEA and children have suffered greatly as a result of the Government's proposal. The Government torpedoed the LEA's plans. I should like to

know how much money the Government spent on the aborted CTC proposal. I believe that more than £250,000 of public money has been wasted.
I turn to another plank of the Government's policy which has been espoused today—grant-maintained schools. On 14 September 1987, almost four years ago, the right hon. Member for Finchley (Mr. Thatcher) said:
I think most schools will opt out.
That has not happened. Last week, I saw a picture of the Secretary of State for Education and Science who had a piece of paper and was celebrating the fact that 100 schools were grant maintained. But there are 23,250 schools.

Mr. Fatchett: Does the hon. Gentleman share my view that the photograph taken at the Hampshire school was an abuse of Government and political power, in the sense that those 100 children were used for deliberate party political purposes? It would be interesting to know whether the consent of the parents was sought in respect of the photograph in The Daily Telegraph, how much money the Department of Education and Science spent on setting up the photograph, and why the school agreed to become part of what was clearly party political advertising. Does that not again make the point that the Government have to learn an important lesson—that there is a thin line between party political activities and expenditure and Government activities and expenditure? The Government have clearly gone over that line many times.

Mr. Bellotti: I am grateful for that intervention and I entirely agree with it. I should like to see pictures of the Secretary of State with pupils of some of the 23,150 schools that have not opted out, perhaps with some of the derelict buildings that have resulted from lack of Government funding.
That photograph was an abuse of political power. If Ministers set out on a journey expecting most schools to opt out but have found that only 100 out of 23,250 have done so, that is an indictment of their intentions after four years in government.
The Minister referred to and quoted many people who were supportive of the Government's policies. I shall share two quotations with the Minister. The first is from the Conservative chairman of Hampshire education committee, who said on 17 June:
Mr. Clarke is hell bent on destroying local education authorities without any idea of what to put in their place. If there were a logical plan for a system better than the present one I would, as a loyal Conservative support it. But there is not.
Mr. Clarke's ambition is to get all secondary schools and many primary schools opted out. I am going to be left with a demoralised, unhappy dump of an authority running sinking or ghetto schools.
Those are the words of the Conservative chairman of Hampshire education committee. If they are not enough, I will read a second quotation, because the Minister gave us six. The second quotation is from the Conservative chairman of Solihull education committee, who said:
Opting out was initially intended by the government as a get-out clause for crumbling, badly maintained schools which were being ignored by local authorities … it was not meant for schools with attractive buildings, good facilities and excellent examination results.
The whole issue in Solihull will be bruising and damaging to the authority and to the schools concerned.
I have to admit that I am finding some government policy hard to reconcile as a Tory myself. In education particularly there is an almost flippant attitude and consequences of government actions do not seem to have been considered.


I could not put it better than those two Conservative chairmen of education authorities.
The Minister tried to demonstrate one of the advantages of the shift—which the Government are proud to espouse and for which they do not apologise—towards central control of education. The Minister also explained that there had been a shift towards the involvement of parents. One of the main planks of that shift appeared to be the parents annual meeting which the Government had legislated to introduce in every school. From their experience in Sussex, school after school will tell him that those annual meetings are a complete waste of time. Parents are already involved in their children's schools, but they regard the annual meeting as a fruitless waste of time. I know of one secondary school in Sussex which has to organise other social events so that the meeting can take place and so that half a dozen people will attend.
The Government have tackled education reforms, but they have not achieved what they set out to achieve. Indeed, almost the reverse is true in respect of choice. In areas where the Government have funded a city technology college or a grant-maintained school, there has been massive destruction of local authority planning for post-11 education. Local authorities have been left to pick up the pieces for the children in the areas surrounding those areas affected by the changes.
The Liberal Democrats believe that local education authorities should be responsible for all education in their areas. In government we would put back under local education authority control all those grant-maintained schools and CTCs, because it is absolutely essential that education can be well planned in each area. However, we agree with the Government that such schools should have full delegated budgets and much more power than they had previously, because we support that aspect of the Government's proposals. The Government did not need to disrupt the education system in some parts of Britain to achieve some of their aims. Those aims could have been achieved anyway.
There should be more places on governing bodies for people who are intricately involved in education, such as parents and teachers. We have gone overboard in trying to include people from the business community who are not yet convinced that their time will be well spent.
The divisiveness of the assisted places scheme must surely go. Resources must be applied across the board for the benefit of all our children. Parents must also have the opportunity to complain and to raise various issues, and the Liberal Democrats would appoint an education ombudsman so that complaints could be referred when necessary.
The Under-Secretary of State for Education and Science complained about local authorities that restricted so-called "freedom of choice" by not making all information available to all parents, and he referred especially to their restricting education authority services to those schools that were not grant maintained or city technology colleges. The hon. Member for Nottingham, South (Mr. Brandon-Bravo) intervened to say that a crossing patrol had been taken away from a school which was funded outside the local education authority service.
If the Government are taking funds away from local education authorities and giving funds to schools directly, do they really expect local education authorities to use the funds allocated by Government and those raised locally for schools for which they no longer have a financial

responsibility? If they use funds for such schools, there will be a further reduction in the money available for schools which are not grant-maintained schools or city technology colleges. When teachers from those schools are invited to training courses in the local education authority, is it not right that the GMS schools and the CTCs should make a financial contribution? No one can provide something for nothing.
The main theme of today's debate is choice. The Government are found very much wanting on that matter. In the past three or four years, in education authority after education authority, parents have less choice than they had before. East Sussex is an example. Even today, two parents out of 100 each year do not get one of the schools of their choice, although they are asked to write down the names of up to three schools. That is not good enough, because parents should have greater choice. East Sussex has an increased school population in many parts of the county. Given that and the county's inability to build new accommodation, it is obvious that parental choice will be reduced.
The title of the debate refers to "Choice", but the reality is that for parents, there is not choice, but preference. Parents are asked to give their preferences; they are not asked to choose. Liberal Democrats want parents to be able to choose. I was chairman of the education authority in East Sussex between 1986 and 1987. That year still stands as the best example in the past decade of parents receiving their first choice in education. We were able to achieve that because we appointed 100 extra teachers that year to ensure that teachers were available to teach the children in the schools that the parents chose. In that year, 96·5 per cent. of parents obtained their first preference at 11-plus. If the Government were serious about choice, they would encourage local education authorities—and financially support them—to employ the number of teachers who are needed for parents to achieve their choice.
The Government would also have to address the issue of school accommodation and buildings. If there is spare capacity, the appointment of more teachers is fine, but some schools are full. The Government's building programme is such that, one after another, schools make application through the local education authority to the Government for funds to build new schools or to extend existing schools, but the Government are not prepared to allocate the necessary sums. The Government must be honest. Unless they are prepared for local education authorities to employ more teachers and unless they are prepared to allocate funds for extra school buildings, choice becomes a fiasco and a fallacy.
It is interesting to read the answer to a written question in Hansard on 26 April 1991. We see that 34 of the 39 county councils that are local education authorities have to spend more than 100 per cent. of the money that they are allocated for education through the standard spending assessment to achieve the standards that we all believe should be achieved in our schools. That clearly shows that the Government are underfunding and failing to recognise what is needed to deliver the education service.
My hon. Friend the Member for Southport (Mr. Fearn) has asked me to say that in Sefton, £20 million needs to be spent immediately on school building premises, yet the Government are not prepared to support the local education authority in that regard.
May I outline two or three areas in which we differ from the Government—

Mr. Philip Oppenheim: The hon. Gentleman has already spoken for long enough.

Mr. Bellotti: I shall bear the time in mind, but the Minister spoke for 50 minutes. I am making the only contribution from my party today and I wish to develop a few more points.
The hon. Member for Leeds, Central (Mr. Fatchett) referred to nursery education and a table on that matter. It is generally recognised that more resources must be allocated to pre-school education and the Liberal Democrats' alternative Budget statement in March contained a figure of £250 million, which would be available for the education of children aged three to five. It is essential that every parent who wishes to have education for that age group should be able to achieve it. Whether it is in school, in a pre-school play group, or whatever, it should be available on demand. The latest figure that I have seen in the Labour party's proposals is £50 million and I encourage the hon. Member for Leeds, Central to try to have that figure increased.
If ever there was an area in which the Government have failed to deliver, it is special education. Every local education authority should have a separate special educational needs service, which should be properly funded and involved with parents. Wherever possible, it should be integrated in the mainstream of schools. Local education authorities do not have the resources to ensure that children are statemented almost immediately a need is identified by a teacher. My authority of East Sussex tries to do that within a time scale of six months, but, with the discussion thereafter about the child's needs and which school it should attend, it can be as much as a year before such a child receives the education that it needs.
The Minister will be aware of early-day motion 972, which has now attracted 123 signatures. It draws attention to the serious problem of special educational needs and whether the Education Act 1981 is being fulfilled. Is the Minister prepared, following today's debate, at least to see whether there are ways in which the Government could help local authorities, with extra funds or whatever, to adopt higher standards in relation to special educational needs?
The hon. Member for Leeds, Central spoke of the consensus on the national curriculum. The Government had a consensus in the three major parties on that issue, but went over the top—a phrase which has been used several times today. The national curriculum has now put teachers in a straitjacket with no flexibility. I met the secretary general of the Soviet Union teachers' association two years ago and he told me that the Government of the Soviet Union had decided that they would control less of the curriculum from the centre and allow individual schools, with parental support, to decide on parts of the curriculum. I shared with him the view that the British Government were going in the opposite direction and putting teachers and schools in a position where they have absolutely no flexibility.
As I come to the end of my remarks—[Interruption.] I have dropped 10 pages of my notes in the light of today's disruption—we could all have spoken for longer if events had turned out differently.
I wish to draw attention to the role of teachers. Unless hon. Members are united in praising and encouraging teachers, we shall not be doing our best for children. It is those teachers whom we rely on to deliver the education. Year after year, when I was outside the House, I heard murmurs from Ministers deploring teachers in our schools, when I wanted to hear words of encouragement and support. One way to elevate the status of teachers would be to have a general teaching council, which would give them the status that they deserve. That council could control professional qualifications and set standards which would be acceptable to all political parties.
In this context, when announcing the pay review body we should consider that, from 1974 to 1989, teachers' salaries as a proportion of average non-manual earnings fell from more than 135 per cent. to less than 110 per cent. One cannot devalue a profession over that period by reducing pay in relation to others and then expect it to deliver the goods.
A subject that has not been touched on much today is that of 16 to 18-year-olds. I sincerely believe that when the Secretary of State announced in the House that central Government would control sixth-form colleges and further education, the Government did not realise that that would cause the chaos that we have now and which will continue. There is now a dual track system, in which the education of some 16 to 18-year-olds will be under central Government control and others' education will be controlled by local authorities. That is a recipe for chaos as time goes by and we try to address the key issue of the staying-on rate of 16-year-olds.
We have heard about a table relating to three to five-year-olds. I shall refer to one relating to 16 to 18-year-olds which comes from the Department of Education and Science statistical bulletin for 1990. It says that in 1988, 79 per cent. of the 16 to 18-year-old age range in the United States were in education, in Japan there were 77 per cent., in France 66 per cent. and in West Germany 47 per cent. Once again, the United Kingdom came bottom of the league, with only 35 per cent. of 16 to 18-year-olds in education. Unless we address that issue —the Government are not doing so through the youth training scheme cuts—we shall have problems.
The word "choice" appears in the debate's title, but in this context "choice" is a delusion. The title also includes the word "standards"—such values are far too important to leave simply in the hands of the Government. The Minister concluded by saying that he wanted to put children first. Having observed the Government's education policy from outside the House for 12 years, I believe that the one thing that the Government have not done is to put children first.

Mr. Anthony Coombs: I support the Government in the radical reforms that they have introduced during the past 10 and 11 years to improve choice and accountability and, therefore, standards. As my right hon. Friend the Member for Brent, North (Sir R. Boyson) said so brilliantly, they have been doing so in an


educational climate which, for more than 20 years, has made the job of good teachers—who constitute the vast majority—that much more difficult.
There are three basic characteristics of that educational climate. First, it was a climate that judged standards by what resources were put into education, rather than what was turned out at the end of the day. Despite the increases in resources that the Government have made available for education, particularly teachers' salaries, I do not see any connection between existing standards and the resources that have been put into education during the past 20 years. In many cases, precisely the opposite is true.
Secondly, the presumption is too often made that uniformity would allow excellence to be preserved. It is assumed that by making schools comprehensive and ignoring parental choice, good standards could be imposed on schools. Good standards are attained with the support of parents for their children's education. That can be done only in a regime that gives parents a genuine choice.
The third characteristic of the old regime was a fundamental distaste for testing or any sort of relative elitist standards. When the Conservatives were in power in Birmingham in 1982–84, I was on the education committee. We set up a standards working party, but as soon as we lost power in 1984 it was abolished, even though it was the only way that the education committee could address what was happening in the classrooms.
When the National Foundation for Educational Research carried out a review of reading standards in schools it found that only 26 out of 95 local education authorities could provide any information about the movement of reading standards in their schools over the year. That is appalling and shows how testing and assessment have fallen into disrepute in our schools.
The Government have adopted the right approach by making parents more accountable either through grant-maintained schools or local management of schools. I am the chairman of the board of governors of a large comprehensive school in the north of Birmingham. Even on the pilot scheme that is available under local management of schools, that school is three teachers better off and has managed to increase the amount spent on equipment, tools and materials by no less than 50 per cent. in two years. It has had a tremendous effect on teachers' morale.
Further reform would be welcome in three areas and would improve standards. Attainment targets and testing should be made more comprehensible for the layman and the parent. I was delighted to see that in May the number of attainment targets for mathematics and science was reduced from about 14 or 17 to five in each subject and that the number generally has been halved.
Good teachers want to know how children are doing relative to others in the class. I am certain that parents want to know that and also want to know how the class fares compared with other classes in the school and in the area. I hope that Professor Griffiths, who will chair the School Examinations and Assessment Council, will ensure that there is a more easily comprehended exam-oriented rather than course-oriented system of assessment, because that would improve standards.
Secondly, we must look at qualifications for head teachers. There should be no restrictive practices about how one becomes a head teacher, but there is evidence that headmasters do not have sufficient knowledge of what goes

on in their classrooms. As a result, they are not able to resolve the problem of teachers whose expectations of their pupils are too low. I was in a school a few days ago and a parent told me, "In class my son was told by the teacher to expect only a grade D at GCSE this year." Such a low level of expectation condemns pupils to low standards and can be resolved adequately only by heads of departments reporting to head teachers who are properly briefed. Head teachers could do more such operational work.
I am glad to note that the Secretary of State proposes to reform the structure of Her Majesty's inspectorate of schools. I hope that its operations will also be reformed. We need to look at the inspectorate system as a whole, especially as more schools become grant maintained. I should like to see more co-ordination between the activities of the schools inspectors employed by local education authorities and Her Majesty's inspectorate. I hope that the Government will address that.

Mr. John Fraser: I shall confine myself to problems in education in my borough. Lambeth has been responsible for education for 16 months since 1 April 1990. We did not want to be responsible for education and warned the Government about the consequences of the break-up of the Inner London education authority. We realised that if education were left to financially hard-pressed boroughs with intense social and economic pressures, which were described by Lord Scarman in his report and in a series of inner-city reports, there would be a danger that in poor areas with shrinking populations education would be ghetto-ised. That underlines the difficulties in what is a relatively small area for an education authority. That is what has happened in my borough.
Achievement in education is often a reflection of the social and economic pressures at home and among families. My constituency, which covers a third of Lambeth, has unemployment approaching 25 per cent. and unemployment has increased by 40 per cent. over the past 12 months. In the borough as a whole, 25 per cent. of the population is in receipt of poll tax benefit, which shows the levels of poverty among the families of schoolchildren. Seven out of 10 people in Lambeth are tenants and 60 per cent. of those tenants are in receipt of housing benefit—another sign of the depths of poverty. We have the second-highest level of lone parents anywhere in England. I shall not moralise about single-parent families, but it is a fact that it is immensely more difficult for a child from a lone-parent family to achieve educational attainment than it is for a child from a two-parent family.
In some of our postal districts—indeed, in one that the Prime Minister once represented as a councillor—more than half the population is unemployed and a quarter is living on social security. Coupled with that, between a quarter and a third of the population is black. I hasten to add that I am not equating poverty and a failure to achieve attainment with being black, but that adds another burden. Discrimination, and sometimes the lack of a tradition of education, make it even more difficult to succeed.
That is the social and economic background in which Lambeth has to act as an education authority. The break-up of ILEA was bound to make it more difficult and was bound, eventually, to reduce the choice that is crucial


for the people whom I represent. Already, more than half our secondary school pupils are educated out of the borough. Before the break-up of ILEA, that was unimportant. My children were educated out of the borough, partly by the wife of the right hon. Member for Brent, North (Sir R. Boyson) in a comprehensive school in adjoining Southwark.
With the break-up of ILEA, local authorities are becoming more parochial in the way that they view intake, and opting out will make the choice for pupils who go outside the borough even more restricted. For instance, the city technology college in what was Sylvan school in Upper Norwood is bound to be choosing its pupils on the basis of aptitude and ability. There is bound to be a selection process that operates against the people whom I represent.
I recently had a letter from a former Member of Parliament, and a former councillor, about what is happening in Bromley, another adjoining borough. Mr. Macdonald tells me:
Bromley had 17 Secondary Schools … So far 1 has opted out and 6 more … await the Secretary of State's decision.
I will not detain the House by reading out all the arguments from this responsible person, but it is clear that opting out will deny children from my borough access to schools in neighbouring boroughs. Furthermore—it is a decision that I regret—the pressure of poll tax capping on my borough has led to the council not giving travel passes or maintenance grants to children taking sixth-form education outside the borough.
I shall give what is perhaps an extreme example of how parochialism will reduce choice and chance. Islington runs a further education college which has an optical technology unit. I would not have known about it if my son had not happened to study optical technology. He travels once a week from Brighton to Islington because Islington provides the only course that is available in southern England. Islington has discovered that only one or two Islington children take up the course, so the course is at risk of being closed. That is a vivid illustration of the way in which the break-up of education in London will start to restrict choice because of the taking of parochial views.
As well as reduced choice, we have reduced resources. That was always inevitable following the break-up of ILEA. In the City of London there are about 12 affluent parents paying for one child while in the borough which I represent each child is supported by only six parents. Locally based resources in my constituency are much less than in many other areas.
The break-up of ILEA was bound to have the greatest effect on boroughs such as the one in my constituency and to lead to those that have having more and those who have less having even less.
One of the prime purposes of my being a Member of this place has been to explore and promote the ideal of equality—at least equality of opportunity. No great equality of wealth can be brought about by tax redistribution or by giving people extra benefits. Some of the figures that relate to those on social security in the area that I represent illustrate that. One way of achieving more equality, however, is the provision of education

opportunity. It is the one thing which enables people to break out of their history and inheritance and to achieve equality.
I shall illustrate my argument with some figures. It is extremely difficult to accumulate £250,000. That sum, as a capital investment, would produce an income of about £25,000 a year. It would be difficult by the redistribution of wealth to give everyone £250,000, but if someone is lucky enough or good enough to pass A-level examinations and to go to university, he or she will have no great difficulty in London in earning £25,000 a year at the age of 23 or 24 in some of the professions. That is the equivalent of the benefit of owning £250,000 and that is an illustration that people with education achievement can break through much more rapidly than others.
Education provides the only means by which people in a borough such as the one that I represent can break the chains round them and enjoy equal opportunity. Unfortunately, there are huge impediments. Many children grow up in homes where there are not many books, where there is not the tradition of literature. Often the religious tradition, for example, was tied up with literature, but that tradition has been diminishing. In many homes the television is much more important than the book. That is the position in far too many families.
There are also far too many families where there is no one to talk to children. A single parent is often under great pressure, so the child is left with a minder. That child can be almost irreparably damaged by the age of five years. There are far too many families that have experienced homelessness. That has a tremendously deleterious effect on young children as they move from one bed-and-breakfast hotel to another.
When reading a novel by Tom Wolfe entitled "Bonfire of the Vanities", I was struck by a throwaway remark about someone coming from a family of third-generation welfare. I thought about my constituency. Certainly there are families who are second-generation welfare. If we do not break the cycle, we could have third-generation families in that position. It will be extremely difficult for them to break out of that inheritance.
Are we breaking out? Examination results are not a bad measure of equality and achievement. I had a vivid illustration of that when I attended a parents meeting in Brixton. A black mother said, "Don't bother so much about the equal opportunities policy, just give my child his O-levels, his A-levels and his degree, and his opportunities will be equal. All the cultural aspects in the world that are put into the curriculum will be no substitute for the inequality that my child will suffer without those qualifications."
In the schools in my borough, only 30 per cent. of children obtain between one and four GCSEs, grades A to C, against a national average of just under 50 per cent. Only a handful of children took A-levels at the last examination, although we should not ignore the fact that many children—511—took A-levels at colleges. Nevertheless, only 35 children, out of a 250,000 population, took A-level examinations in Lambeth's schools. Only one in five children gained GCSE mathematics, grades A to C. Because some of them did not even sit the mathematics exam, only 15 per cent. of children in the borough gained GCSE in mathematics. Indeed, 10 per cent. of the children entered for examinations did not turn up for the exam. It is against that background that I contrast the record in my schools


with my devout belief in the importance of giving equal opportunity through educational achievement. There is a huge discrepancy in my area, which does not exist in all other areas.
I make it clear that what I say is not a reflection on Lambeth. I know that some people will say that it is, but Lambeth has been doing the job for only 16 months. Indeed, the figures that I have given are marginally better than they were under the Inner London education authority. Even the Minister has praised the quality in our schools. It is not a reflection on our schools, nor a reflection on the quality and commitment of our teachers. We are not saying that the position is hopeless. Some schools achieve examination results above the national level, which shows a degree of commitment and interest.
Of course, what I have said does not apply only to our secondary schools because the damage is often done before the children leave primary school. Often, the damage is done by the time they go to primary school because they have had no nursery education, and sometimes they have lived in bed-and-breakfast accommodation and been looked after in child minding facilities. We cannot blame just one segment for any failure. I am underlining the need to provide adequate resources to balance the inequalities between the opportunities for one part of the population and those for another part. I shall not rehearse all the arguments against the poll tax. However, as a result of poll tax restrictions, less money is being spent in my borough this year, which implies a 7 per cent. cut. Lambeth has done its best to protect statutory services, and primary and secondary education in particular, but I am appalled at the cuts that it has been compelled to make in youth services, including sport.
In a city borough, sport is an important adjunct to education, because athletics promotes an understanding of the relationship between effort and reward. That is an important analogy, which teaches that if one studies hard, one achieves results. I am unhappy that boroughs such as Lambeth are forced to concentrate on statutory services at the neglect of others.
There is no substitute for additional resources for boroughs such as Lambeth which have such enormous discrepancies in educational results and in which people are denied an opportunity to play their full part in society. I am not suggesting that throwing money at an education authority is the only way of solving its problems. I demonstrated that results can be achieved with only limited resources. However, if there is to be equality of opportunity and if people are to be allowed to break out of the chains of their inheritance, more resources must be provided—and at the moment there are not enough of them.

Mr. James Pawsey: Two of the Government's principal objectives are greater parental choice and improved quality. We want parents to have the maximum possible choice, but if they are to exercise it, they must be kept properly informed. I therefore welcome proposals to increase the available information about individual schools. It should not be restricted to examination results but should include teacher numbers and teacher continuity.
The information given should also include truancy levels. I welcome the recently published regulations

requiring schools to differentiate between authorised and unauthorised absences. Some schools have accepted high truancy levels for far too long. As my right hon. Friend the Member for Brent, North (Sir R. Boyson) said, if children do not attend school, they cannot learn.
When parents are able to make an informed choice of schools, standards will rise. The majority of parents naturally want the best for their own children, and will elect to send them to the school which offers the quality of education best suited to their own children. Schools that do not offer parents what they want, where academic standards are slack and discipline poor, will not attract pupils. Parental choice is a powerful force, and when it is unfettered it will improve standards. The best schools will serve as a benchmark against which others in the area will be judged.
For too long the assumption has been made that the only good state education is local authority education, but that concept is being challenged, and that will increasingly be challenged with the growth of the grant-maintained sector. One hundred grant-maintained schools have been approved and the applications of a further 100 are well advanced. Their popularity is due not only to the additional cash that they receive but to the greater independence that they enjoy. Now that the apron strings which tied them to local education authorities have been cut, grant-maintained schools are able more accurately to reflect parents' wishes and aspirations and to take account of local conditions. They no longer have to obey the diktats of a local education authority which is sometimes motivated more by political than educational motives.
With the benefit of hindsight, I am convinced that we did not do enough to publicise the benefits of grant-maintained status. When we introduced the Education Reform Bill, we naively did not anticipate the fact that some LEAs would mount massive campaigns of disinformation against grant-maintained status, funded by charge payers' money. I was delighted when, in a recent speech to the Centre for Policy Studies, my right hon. Friend the Prime Minister said that the Government would legislate to limit the amount that a local education authority could spend to campaign against grant-maintained status.
I also welcome the provision that allows school governing bodies in future to be reimbursed up to the same limit as LEAs to fund their own campaigns for school freedom I make no secret of the fact that I want more schools to be grant maintained. I expect grant-maintained schools to become the 1990s equivalent of the council house sales of the last decade. Both allow more choice, more freedom and greater independence. I believe that even the Labour party will come to accept grant-maintained schools, just as it has been forced to accept the sale of council houses. The conversion may be slow, but I think that the Labour party will recognise the power of parents' arguments for grant-maintained status, as it has been made to recognise the strength of tenants' arguments for council house sales.
I am convinced that the only reason why more schools have not become grant maintained is that many head teachers and their staff fear—I use the word advisedly—that if, God forbid, Labour wins the next election and returns grant-maintained schools to the local education authorities, those who suported grant-maintained status will be penalised—their cards will be marked. That is a sad


comment on the position currently adopted by some LEAs and another reason why their stranglehold on state education should be broken.
However, it is not just grant-maintained schools which provide parents with choice. Choice is also provided by the city technology colleges. Although only 13 have emerged so far, and the process is slow, that should not detract from the fact that they are proving highly popular and successful. Solihull CTC, for example, has received 1,000 applications for its 180 annual places. It takes children at all levels of ability, including "statemented" pupils and those with special needs. It certainly does not cream off pupils. The CTC ethos ensures that children work—Solihull's school day is between 20 and 25 per cent. longer than the average day at a comparable LEA school, although the college receives no extra funding.
Incidentally, 66·4 per cent. of the intake at Emmanuel CTC in Gateshead come from deprived or severely Deprived backgrounds. The principal says:
We have taken more than our quota of disadvantaged children.
There is not much cream there!
Any debate about quality and choice in education must, of course, refer to the nation's teachers. As I have said repeatedly in the House, the majority of the nation's teachers are dedicated both to their profession and to the children in their charge. That dedication is now being recognised by an improvement in remuneration, and by the establishment of a pay review body. When this year's pay award has been full implemented, the average classroom teacher will receive about £17,000 a year, while seven out of 10 secondary school teachers will earn more than £20,000. That is good news—news which builds on the success of the interim advisory committee.
One of the more significant sets of statistics that I have seen recently refers to the number of days lost through strike action taken by teachers. In a parliamentary answer dated 10 June, my hon. Friend the Minister told me that in the three years 1988, 1989 and 1990, fewer than 60,000 days were lost through industrial action, while in one single year—1985—851,000 days were lost through strikes. We have come a long way since the dark days of 1985. Teachers now recognise the good intent of the present Administration and I believe that we are now winning the battle for the hearts and minds of the nation's teachers. Over the next few years, the review body that the Government have announced will serve to enhance the esteem in which teachers are held. It should be recalled that, without teachers' good will, the reforms that we have introduced will be that much harder to implement.
Independence and freedom have also found their way into advanced education. Despite opposition, the polytechnics are no longer tied to local education authorities and, despite many gloomy forecasts from the Opposition and their cohorts in the LEAs, no polytechnic has gone bankrupt. Indeed, the, reverse is true—they are extending choice, increasing the number of courses and offering students greater variety than ever before. With the excellent example of the polytechnics before us, we now intend to free up the colleges of further education and remove the uninspired hand of LEAs from their affairs. I am certain that some of the benefits that the polytechnics now enjoy will be extended to colleges of further education.
One of the best indicators of the Government's success in schools is, paradoxically, to be found in advanced education. When we came to office in 1979, only one in eight of the target group were in advanced education. The figure is now one in five and by 2000 it will be one in three. Those figures illustrate two things—first, that the Government have much expanded the sector to absorb the greater number of people now seeking advanced education and, secondly, that large numbers of young people are now suitably qualified and able to take advantage of that expansion. There are now more than 1 million young people in our colleges, that figure being about a quarter of a million up on that for 1979. That is a real indication of the Government's success, and my right hon. and hon. Friends can certainly take credit for it.
No success comes on the cheap, however, and this year, for example, spending on education is up by 16 per cent. —more than twice the rate of inflation—and I have no doubt that the Conservative Administration will further increase funding to the benefit of the nation's children.
Our aim, in a nutshell, is further to improve the quality and standard of our state education so that it compares favourably with that offered by any other country in the world. That is our objective, and that is what we shall achieve.
The Minister may gain the impression that I am less than enthusiastic about the role of local education authorities. I do not doubt that they have done excellent work in the past 100 years but times change, and organisations—no matter how good—must respond to change. In my view, with the emergence of the grant-maintained schools and with the independence of the polytechnics and colleges of further education, the role of the LEAs will be much diminished. I hope, therefore, that proposals will soon be put before the House to redefine the role of LEAs.

Mr. George Walden: I hope that you, Madam Deputy Speaker, will not take fright at the bundle of papers in my hand. It provides the basis for the first part of my argument and goes right to the source of the education problems that the House faces. No matter how much money we put into it and no matter how many reforms that we introduce, we shall never get education right unless we get our ideas about education right. The document, "Language in the National Curriculum—Materials for Professional Development", intended for the training of teachers, goes right to the heart of our education problems. It cost £21 million to produce. It is part of a project on the English language and I propose to quote one or two passages to give the House some idea of the quality of the report. It states:
The speech situation is almost always a shared one, and the writing situation is usually an isolated one.
You may smile, Madam Deputy Speaker, but that quotation probably cost you a fiver. The document also states:
The interactive purpose of speech events affects the language used.
Blow me down—another fiver gone. It talks of
…secretarial surface features such as spelling and punctuation".
Note the combined disdain for secretaries and for teaching people how to write and spell. Again I quote:
Most speech contexts are interactive, and involve the participants in both speaking and listening.


I did not know that before! Yet another fiver gone.
Let us consider the report's ideological bent. It states:
Parents need educating. If they are pulling pupils in a direction that we do not endorse and which may subvert our aims, what are we doing to counter this? A valuable staff activity would be to devise a poster or pamphlet setting out the school's approach to spelling and justifying it.
The writers of that report would have a hard time justifying some of the approaches to spelling and grammar taken in that lamentable document. Regrettably, not all parts of the document are as amusing, in a funereal way, as some of those quotations. Most of the report is taken up with banal, pseudo-intellectual bilge—that is what the document is and it cost the taxpayer £21 million.
The Government's aim on teacher training is to reduce the amount of theory involved and to have more practical work. But the document states:
An additional linguistic trend, not confined to functional theories of language, has been welcome to the compilers of the LINC programme. Until about 15 years ago, most linguistic studies were characterised by attention to small units of language, up to but not beyond the level of the sentence, usually out of the context in which they were actually used. More recently. however, developments in text linguistics, discourse analysis and functional grammar have provided a basis for examining patterns of language across complete texts. The LINC programme recognises the importance of this work and its relevance to education. Accordingly a text-based view of language is adopted and complete texts are the usual focus of attention.
We move in that paragraph to a decision to base the whole of the £21 million document and the training for English in the national curriculum on something which is, admittedly, called a "linguistic trend".
I have no faith in the education industry, as constituted, to take account of new ideas in education and to treat them with reserve. They are merely ideas and do not deserve to be immediately implemented and foisted on the impressionable minds of young teachers who, sadly, are among the lowest achievers in terms of A-levels.
What is the effect of having hastily adapted and adopted theories of unproven substance as the basis of reports, then thrusting them on people who—let us be frank—may not be of the highest intellectual calibre? Moreover, that is much more likely to damage their students than it is to aid them. The Government have much work to do to sort out the over-reliance on theory, transmitted and transmuted by people who are not of the first intellectual quality and in whose hands these theories can be extremely dangerous.
First, the education industry is highly inbred as a profession. Secondly, it is isolated from life. It includes people who have never in their careers left education—they come out of the classroom, go on to teacher training, do some teaching and go into university. The whole thing is cyclical and introverted. Thirdly, some people will ask whether this is a serious academic discipline at all—it certainly has pretentions to being such. It is a fact of life —not just my opinion—that the people with the best brains do not teach in the educational departments of universities and that those who do are not always held in the highest esteem. As a result, the dangers of a hasty adaptation of fashionable dogmas, of which I gave examples for the LINC report, are extremely serious.
You may think, Madam Deputy Speaker, that I am building too much on this report, but, although the Government decided that the report was so banal, so sub-standard and so inadequate that they would not publish it, even though the project cost £21 million. it will

still be used to teach teachers, because that section of education is outside Government control. The hon. Member for Norwood (Mr. Fraser) spoke about the educational plight of his constituents. I understand his concern, as I was taught in Dagenham which had a few problems when I was a boy. Those children will get nowhere under such an approach because they are told, "Don't worry about the secretarial aspects of punctuation or spelling; that's for secretaries. We're not going to bother your heads about that." They will not get a job that way. The problem is not merely one of funding and organisation, because ideas determine the outcome of education. If ideas that are fundamentally flawed are implemented and absorbed by people who are more interested in playing around with those ideas than with the end product, people in Lambeth and elsewhere will not be able to write or to get a job. How can they get A-levels when they cannot write properly?
On a higher level, I could not help noticing that Mrs. Raisa Gorbachev said that people in Britain no longer read English literature. She is right, but they can read shop signs. If you think that I am joking, Madam Deputy Speaker, I refer again to the £21 million report—a bundle of fun—which mentions shop signs in its passage about literary language. I do not want to bore the House or to be accused of tedium, but this document is written in such tedious language that I could quickly send the House to sleep. The report says that we must deconstruct—that fashionable word has crept into the mind of these low-grade people—the whole idea that there are different sorts of literature. Until now we had believed—in our feeble way—that there was a difference between Barbara Cartland and some perhaps slightly more elevated forms of literature. But no; we are told that we must deconstruct that idea. We are told that literature occurs everywhere.
The report states:
Such contexts include advertising language, newspaper headlines, playing on puns in everyday conversations, the rhetorical patterning of a parliamentary speech"—
I hope that I cannot be accused of that—
the imaginative names used on shop fronts by hairdressers and hairsylists.
As Raisa Gorbachev said, we might not read English literature, but we shall breed children who might be able to make puns on shop signs, so our aims are extremely high.
Let us imagine the effect of such semi-intellectual claptrap on the impressionable minds of some young teachers. Although the Government are not publishing the report, it will affect young teachers and will perpetuate a vicious circle of under-achievement in places such as Lambeth.
Another fundamental question is that of the so-called democratic nature of the organisation of our education. As I said, it is not, broadly speaking, run by the Government; it is run by liberal-left ideologues—I must use that phrase —and by local authorities. That is where the power lies. What is the democratic basis of those local education authorities? Statistically, the highest turnout in the most recent elections was about 50 per cent. The average was much lower. One of the lowest levels in the shire counties was reached in Humberside, where the figure was 34 per cent. The figure for my county of Buckinghamshire was not brilliant, at 33 per cent. The figure for Hackney was 36 per cent., as it was for Newham. Those figures apply to the turnout. The basis for the exercise of educational power is rather lower because it is a proportion of the number of


those eligible to vote. In Humberside, all educational decisions are based on the support of 14 per cent. of the electorate. The figure for Staffordshire is 15·9 percent.; for Hackney it is 18·7 per cent. and for Newham it is 20 per cent. Those are Labour authorities and the turnout is rather low. However, I am sorry to say that there are also Conservative examples.
Labour Members and the Liberal Democrats—we must not forget them—rail against what we regard as choice and say that what is sacrosanct is the democratic and local nature of education. I have described the reality. When so much grave twaddle is talked in the House about the democratic roots of education, we should realise that that simply is not true. The turnout in our local elections is extremely low. People run education without having any real democratic authority. If a quorum were involved, it would not be attained on such numbers.
The implications for grant-maintained schools are serious. In such schools, there has to be a 50 per cent. quorum in the first ballot. No such quorum applies to the people who run education in local authorities. I have a practical suggestion for my hon. Friend the Minister. I want him to drop the 50 per cent. barrier for grant-maintained schools. There should be a barrier, because it is right that there should be some form of consultation. However, the barrier should be dropped to the level of participation in the most recent local elections. If someone proposes an opting-out—grant-maintained—school in Humberside, the barrier should be not 50 per cent., but 34 per cent., because that was the turnout in the most recent local elections in Humberside as a result of which Humberside county council runs the entirety of education in its area.
To use the current phrase, that would provide a level playing field. Parents would not have to achieve a level of turnout which was far superior to the level reached by Staffordshire and Humberside county councils which is their basis for running their policies. That is a practical suggestion. Anything that helps to break up the system in a positive and fruitful way, gives choice and encourages grant-maintained schools should be permanently at the front of our minds.
The Government have done wonders over the past decade in increasing the proportion of people taking part in higher education. I very much welcome the focus on getting people to stay on at school. However, a problem has come up in my rural constituency. In education, we not only need to get the ideas right, which is fundamental, but we need the resources to support them. I understand it when hon. Members, such as the hon. Member for Norwood, talk about that.
In my constituency, a difficulty has arisen in encouraging parents to keep their children at school after the age of 16. A new cost for travel arrangements has just been put on them. There will no longer be a subsidy for travel. In a rural constituency, that is important because parents have to pay about £120 a year. If we wish to encourage students to stay on at school, which is a national necessity, it is no good telling parents that if their child stays on at school after 16, they will not only be deprived of the income that that child would have contributed to the family finances, but will have to pay £120 extra a year for the child's journey to school. The

matter deserves attention. I have taken it up with the county council, which has a tight budget, partly because of the expansion of special educational needs provision. The matter poses a problem for my constituents, especially for those who are keen to take the new opportunity of keeping their children on at school after the age of 16 which the Government are offering.
I welcome what the Government are doing in the SEAC and what they are doing to give parents more choice through the grant-maintained system. Education in this country will never come right until there is a pincer movement against the educational establishment. It is a sclerotic establishment which is not open to new views and it goes out of its way, not to subvert—that is too dramatic a word—but to resist like a congealed jelly everything new. We need people at the top who are forceful and who are not bureaucrats and we need escape routes at the bottom for the children who are trapped there. Only then will we be able to put pressure on that Brezhnevite system and open it up to the benefit of all children.

Mr. Harry Greenway: I hope, Mr. Speaker, that you will forgive me if I leave shortly after speaking because my daughter is to be married tomorrow and there is much to be done.
The Brethren wrote to me this week and raised a number of points of conscience with which I should have liked to deal, but I cannot do so in the time available. However, I know that they would like to have on record the fact that they have strong views on subjects such as sex education and computer education, which many schools and local authorities are not taking into account.
I strongly support the emphasis on choice that my hon. Friend the Minister set out in his opening speech. The speech of the hon. Member for Norwood (Mr. Fraser) was interesting. He said that he was looking for equality of opportunity within Lambeth, but his constituents have always voted Labour. They voted for an authority which removed choice. Circular 10/66 stated that all secondary schools should be comprehensive and uniform in nature, a ruling which was heavily applied by the inner London education authority and totally applied in Lambeth. I know almost every school in Lambeth from my 23 years of teaching in London. I saw excellent schools being changed in character from good grammar, technical and secondary modern schools into comprehensives. That policy took away all choice, ambition and competition in schools.
The hon. Member for Norwood lamented the fact that children have little choice to learn about life through sport, and I agreed with the thesis that he put before the House. I am sorry that the hon. Gentleman is no longer here, but perhaps he will read what I have said. In the Dick Shepherd school near the Tulse Hill school in his borough, for a long time children were not allowed to play competitive games. Some brilliant West Indian boys at that school were known to have great cricketing talents, and they asked only to have a wicket painted on the wall and to be allowed to play competitive cricket, but the school, under the ILEA, would not allow them to do so. The hon. Gentleman may not know about that case, but I did not hear him championing the need for proper team games and competitive sport at that time. We lost generations of children to bad, uniform education which did not take account of the need to give children a proper


choice between schools and a choice of courses within schools. They were also grossly denied the opportunity to learn through sport.
My hon. Friend the Minister mentioned the assisted places scheme, which has been a great success without being a highly expensive operation. Today, at a cost of £70 million, 28,000 children are successfully educated under that scheme. My hon. Friend went on to warn about city technology colleges and I support him on that.
My hon. Friend was challenged by the hon. Member for Eastbourne (Mr. Bellotti), who said that very few schools were becoming grant maintained. In the London borough of Ealing, more than 50 per cent. of secondary schools have voted to become grant maintained, including the school to which the Leader of the Opposition sent his children.
I do not think that the hon. Member for Leeds, Central (Mr. Fatchett) or anybody else should lose sight of the enormous political and educational revolution that that policy will bring to this country. Were the Labour party ever to regain power and seek to return to the old system, it would—as my hon. Friend the Member for Buckingham (Mr. Walden) said—reverse decisions thoughtfully taken by parents in possession of the facts after attending meetings. The schools have taken a deliberate and carefully thought out decision to become grant maintained. We are witnessing an educational revolution of the highest importance, which the Labour party would destroy.
Whatever the hon. Member for Leeds, Central says, sport has declined in many schools simply because the Labour party tried to crush children's competitive instincts and would not allow them to undertake competitive sport. We all remember the head mistress from a Bristol school who said that pupils under the age of five should not have an egg and spoon race because it encouraged them to be competitive, which was bad for them.
When I first started to teach I was elected general secretary of the Westminster Schools Athletic Association —a sports association of all the schools in Westminster, including comprehensives, grammar and secondary modern schools. We had wonderful inter-school competitions which did a lot for children. There were annual prize givings, with prizes for the winners and recognition for the losers, with prizes for some of them as well. I returned to that competition in the last year of ILEA, which is strongly run by the Labour party. There were no prizes or competitions; schools merely received a certificate for being good schools and the children received an acknowledgement for being present. That revolution was achieved by ILEA over about 30 years. It was not good or fair to the children. The Select Committee has said that there must be compulsory basic physical education and games in schools for pupils up to the age of 14, with diverse provision after that, which I strongly support. Teachers should be paid for extra-curricular activities—if I had time, I would develop that point.
As one who marked O-level and A-level papers for 25 years, I want to see proper standarisation between all schools. Lawrence Norcross, former headmaster of Highbury Grove school was right to write in The Daily Telegraph this week that in some schools where there are teachers of high integrity, children receive grades in English and other subjects that are conscientiously thought out by the teachers, whereas in some other schools all the children receive grade A because the teachers are

less conscientious. I do not think that the examining boards are sorting out that problem properly, but they must do so.
It is right to penalise bad spelling and bad grammar in GCSE exams other than English to the extent of 5 per cent., but, as someone who examined English and other subjects at O-level for a long time, I would not want there to be heavier penalisation than that. If one is marking chemistry, one should consider the chemistry element, not the English, although that must be satisfactory. Otherwise, we would be penalising pupils for bad English, bad grammar and bad spelling in both the English and the other papers. To overdo that would be unfair, and to underdo it would be wrong. A balance has been struck and I hope that my hon. Friend has no plans to go further.

Mr. Alan Haselhurst: The debate is about wider choice and higher standards and I had hoped that the hon. Member for Leeds, Central (Mr. Fatchett) would use it to give a detailed analysis of what his party, if it were ever to return to office, would do to raise standards and widen choice. However, we were treated not to a clarion call to Labour's policies but to carping and denigration of Government policies.
The hon. Member for Leeds, Central spoke about the Government's failure on nursery education. The Government did not dismantle the system of nursery education bequeathed to them by their predecessors. Nursery education has been extended, but more needs to be done to improve education than simply to say that the essential foundation is 100 per cent. provision of nursery education. I am anxious, as I am sure are the Government, to see a reduction in the numbers in primary schools, and the Government have significantly improved the pupil-teacher ratio.
I was surprised to hear the hon. Member for Leeds, Central accuse the Government of a lack of consistency in their changes. The only consistency under a Labour Government was the consistency of compulsion, an attempt to squeeze everybody into a comprehensive system that left little opportunity for variety. He also spoke about crumbling schools. Perhaps Labour had no such schools when it was in office. If a perfect system had been bequeathed to us we would not have had repair bills. However, as schools get older there are huge bills for repair.
No one can expect a perfect system in which every building and every facility is in sound repair all the time. Constant attention is required and we are making progress. Labour suggests setting up an education standards commission, which seems likely to have almost draconian powers, and criticises the Government for not giving enough support to local education authorities. That is rich from a party which proposes a commission that will wield a big stick with local authorities.
The shadow of the hon. Member for Derby, South (Mrs. Beckett) was very much apparent on the Opposition Benches; perhaps that explains why so few Labour Members are present. Promises to spend more money on improving education would earn an instant rebuke from the hon. Lady, who has made it clear that there will be no extra money.
We are all anxious to improve standards and should discuss in detail how that can be done. Parental


involvement in education is a key factor. The more we encourage parents to be interested, involved and committed, the more beneficial it will be to whatever we try to achieve in education. In that context, extending the boundaries of choice must be right. In fairness, however, we must recognise that there are limits to the extent of choice and that they are imposed by the availability of resources and, sometimes, by the availability of transport. School buildings are not elastic, and schools cannot simply be expanded to cope with enormous demand. If in any instance, only 45 places are available and there are 140 applications, not everybody can be satisfied, so there cannot be total freedom of choice.
Despite those limiting factors, it is infinitely more rewarding to continue the quest for widening choice, as the Government are, than to constrict education to a standard mould. It is a good thing if we can achieve variety in the types of school that are available. That is more easily done in an urban area and more complicated in a rural area, where distance is a factor. It is a good thing that there should be small, large, single-sex and specialist schools. Therefore, the Government are right to pursue the idea of the grant-maintained school, which is proving to be highly popular as an alternative form of provision.
I am concerned that local education authorities are hostile to these ideas. Essex county council is taking a sniffy attitude to any school that goes for grant-maintained status. It has circulated information, based on figures that are challenged by my hon. Friend the Minister of State, to primary schools in the Saffron Walden area. The authority is warning that the feeder schools may be put at a financial disadvantage if the ballot on whether Saffron Walden county high school should become grant maintained is in favour of such a change. Such activities are highly reprehensible, especially when there is doubt about the figures that are being used.
If standards are to be improved, testing is inescapable. It has to have a place in the system. It goes on all the time in schools and the issue is about what form it takes. An objective form of testing is required to complement teacher testing. There must be a constant element. If we are honest, we will admit that the arrangements this year for seven-year-old testing were not satisfactory. There has been a great reaction from teachers about it and we have said that we shall examine the system. However, we should not be bounced into saying that there is no place for objective testing. We must stick with it, because people must have some idea of what their children are capable of at certain ages, without its putting any stigma on a child who has done less well.
Other factors that are crucial in the improvement of standards include teacher training, which has hardly been mentioned today, but to which the Government are rightly turning their attention. Inspection has been mentioned, and is essential. We must have a tighter system of inspection of our schools. The Government have been inovative in their determination to raise standards and I applaud them. They have set a new, relevant and well-directed agenda. I look forward to its continued implementation.

Mr. John Marshall: I have listened with interest and patience to the debate. I represent the London borough of Barnet, which has the best record of education results of any local authority. It is significant that Conservative councils, year in and year out, produce good education results. Very few Labour councils are in the top quartile of local education authorities and many are in the bottom quartile.

Mr. Mildred Gordon (Bow and Popular): Will the hon. Gentleman give way?

Mr. Marshall: I do not think that I should give way. I have been patient in waiting for my turn. The hon. Lady has waltzed into the debate nine tenths of the way through and does not have the right to ask me to give way in the few seconds that are all that I have left.
The hon. Member for Norwood (Mr. Fraser) said that the problems of Lambeth were created by charge capping. I suggest that they were caused by non-collection of the community charge. Lambeth has specialised in not collecting. It did not collect the old rates, it does not collect rents as it should and it has not collected the community charge as it should. The speech of the hon. Member for Norwood underlined the irresponsibility of Members of this place who are inciting their constituents not to pay the community charge. It is irresponsible of hon. Members such as the hon. Member for Bow and Popular (Ms. Gordon) not to pay the charge until the last minute and then complain that local authorities do not spend the money.

Mr. Gordon: rose—

Mr. Marshall: I must tell the hon. Member for Leeds, Central (Mr. Fatchett) that when I referred to figures in Brent in January 1990 I was talking about Brent under Labour control. It was under Labour control that Brent sent 1,600 children to Barnet, which was under Conservative control, because the parents of those children felt that they were given a better deal by Barnet than by Brent.
In the few minutes that are available to me I wish to praise the teaching profession. Without good teachers there is no hope for the future of our children. When I was an A-level examiner, I always knew which schools had good teachers because those schools produced much better results. I remember paper after paper from one school in which gilt-edged securities appeared as guilt-edged securities. That was the fault of the teaching profession.
The vast majority of the teaching profession is highly dedicated and it is unfortunate that a small minority of teachers give the profession a bad reputation. The sloppy dress of some teachers is all too often the forerunner of sloppy standards. I read a report on my son the other week in which the teacher wrote "William trys hard." I wondered how hard that teacher had tried to produce correct spelling. If that is how he writes "tries", one wonders what else he does in the classroom.
The debate on standards in education was started by Lord Callaghan of Cardiff, who decided that the best way to improve standards was to get rid of direct grant schools and to close grammar schools. He destroyed our centres of excellence. That was his way of improving standards. The Labour party has learnt nothing from that experience. It would abolish the remaining grammar schools, city


technology colleges and grant-maintained schools, which have been so successful. I was pleased to be able to refer earlier in the debate to the great success at Hendon school. There has been a huge upsurge in the number of applicants for places at that school. The amount spent on books has increased by 50 per cent. and extra teaching places have been provided since it became a grant-maintained school as opposed to a local authority school. Grant-maintained schools are centres of high morale within the teaching profession. They are producing good results and I believe that after the next election there will be a huge upsurge in their number.
It is important to maintain the standards of A-levels. At the University of St. Andrews, to which my hon. Friend the Minister and I went, it was noticeable that the students who had studied for A-levels did much better than those who had taken the Scottish higher leaving certificate. That demonstrates the worth of A-levels as against the broader Scottish highers system.
One problem with our education system is that it lacks sufficient diversity I well remember during a visit to Israel going one morning to a school that was like an old-fashioned grammar school. It produced highly academic pupils. In the afternoon I went to another school that taught its pupils motor mechanics and hairdressing, for example. The pupils who received that training secured a job as soon as they left school. I suspect that that is not the position when pupils leave schools in Lambeth and elsewhere. That is why I welcome the CTC programme, which will lead to children being able to acquire a post as soon as they leave school.
The debate is about standards, quality and choice in education and I believe that choice and standards in education are given to us by the voluntary aided sector. It was unfortunate that my hon. Friend the Minister did not refer to the voluntary-aided sector, because many parents in my constituency welcome voluntary-aided schools. Like the chairman of the Conservative party, I send my children to voluntary-aided schools. I ask my hon. Friend to reconsider the problems of Hazmonean high school and Hazmonean preparatory school. I am sure that I have the support of my right hon. Friend the Member for Brent, North (Sir R. Boyson) in asking my hon. Friend the Minister to look positively on those schools. Some 20 to 25 per cent. of people in Barnet go to shul every Saturday. The number of voluntary-aided Jewish places in Barnet is 4·5 per cent. of the total number of school places in the borough. That is far too low a figure. I hope that my hon. Friend the Minister will be able to increase that provision in the years to come.

Mr. Fatchett: With the leave of the House, Madam Deputy Speaker, I shall make a few brief comments in reply to the debate. It has been a somewhat unusual day, with a statement on the G7 summit and another statement to come at 2.30 pm. Perhaps we should recommend that right hon. and hon. Members spend a little more time listening to this important education debate.
I wish to pick up one or two specific points and then make a general point. The hon. Member for Ealing, North (Mr. Greenway) has had to leave, and he apologised to the House for that. He made a number of points about school sport. I am keen on school sport and the Labour party is committed to it. It would help if the hon. Gentleman could

get the facts right and rid himself of one or two of his prejudices. It is not the local authorities, of any political persuasion, that have been against competitive sport; they have found it difficult, for a variety of reasons, to maintain the level of participation in school sport. They have been forced to sell school playing fields and there have been difficulties with space in the curriculum. The charging policies under the Education Reform Act 1988 have made it difficult for schools to use sports centres. Competitive tendering has often put local sports centres and their facilities outside the financial reach of the schools. All those problems were initiated by the Government, and all have reduced the level and quality of school sport.
An editorial in The Times in November 1989 showed that not one authority, whether Labour, Conservative or Liberal Democrat, is against school sport—the problem is delivering it. It would have helped a great deal if the Government had shown some enthusiasm for the report of the physical education working party and, in particular, if they had accepted the recommendation that each child should be given the opportunity to learn to swim by the end of key stage 2 of the national curriculum. It was the Government who opposed that proposal.
A number of hon. Members referred to the importance of teachers. It is true to say that education standards can be improved only by good quality teaching. The hon. Member for Eastbourne (Mr. Bellotti) made the valid point—one wholly in line with Labour party policy—that we need to establish a general teaching council. That would be an important means of improving the status and the professionalism of the teaching profession. There is a broad consensus for that proposal, but for some reason that Government are resisting it.
On occasions, it would help if Conservative Members changed their script. For a decade, they have denigrated and criticised individual teachers. It would improve standards if the Conservative party recognised the value of teachers' contributions.
My general point echoes the point made by the hon. Member for Hendon, South (Mr. Marshall), who let the Conservative cat out of the bag. His vision of a tiered, structured education system under a further period of Conservative Government is one which few parents would accept. It is one under which some youngsters would have opportunities, but others would miss out. His example of the Israeli system gave us an insight into future Conservative education policy.
I ask parents thoughout the country—although I know that this would be a burden—to read the hon. Gentleman's speech. He said that there would be elite schools for a minority of so-called academic youngsters, while others would teach subjects such as motor mechanics and hairdressing. That is a wholly outdated ideological concept, and one which would certainly damage the country's future economy.
If Conservative Members were to study the education systems of Western Europe, it would be clear to them that no other country runs an elite education system. The rest of western Europe is trying to broaden the basis of its children's knowledge and participation, but the hon. Member for Hendon, South wants a 19th century, two tier, structured elitist system.
The Conservatives offer choice for a few on the backs of the majority, and high standards for a few while disregarding the majority. That is the crucial divide between us in the education debate. Labour believes in an


overall improvement in education standards because that is right for the children of this country and their parents, and because improved education is at the root of improved economic efficiency.
Britain needs an education system which provides opportunity for all, but in today's debate we have heard from the Minister downwards only concern among Conservative Members about 100 schools. Labour is concerned about the country's 24,000 schools and all the children who attend them. Labour believes in high standards, high achievement, targets and ambition.

Mr. Oppenheim: The hon. Gentleman should try visiting more schools in Labour authority areas, to see what a mess they have made of them.

Mr. Fatchett: The hon. Member for Amber Valley (Mr. Oppenheim), who went to a private school, knows so little about the maintained sector that it would be better if he did what all Parliamentary Private Secretaries should do, which is to keep quiet. He is good in that role, but when he tries anything more, he is very bad at it.
We are keen to extend opportunity, standards, and ambition to all. The Conservative party's view is limited to the elite, is outdated, and will harm the country's children and its educational and economic performance.

Mr. Fallon: This has been a good debate, but somewhat one-sided. The hon. Member for Leeds, Central (Mr. Fatchett) could not find one Labour Back Bencher to support him today, but had to rely on another member of the Opposition Front Bench, the hon. Member for Norwood (Mr. Fraser)—who made the more thoughtful of the two speeches.
I thank my right hon. and hon. Friends for their contributions. What came across clearly was the high regard in which we hold teachers—contrary to the claims of the hon. Member for Leeds, Central. Over the past six days, I have visited schools in three local authorities in different parts of the country and found teachers who are enthusiastic and committed. We look forward to seeing that borne out in the forthcoming GCSE and A-level results.
My right hon. Friend the Member for Brent, North (Sir R. Boyson) made a trenchant case for selection and discipline and valuable points about teaching methods, in a speech that can be read and read again with profit by us all.
The hon. Member for Eastbourne (Mr. Bellotti) asked me two specific questions. One concerned Brighton city technology college. We did not go ahead with that project because the sponsorship was not there. The hon. Gentleman would certainly have criticised me for going ahead without the 20 per cent. contribution from the private sector. In fact, the money was not lost, and I understand that the site is being actively marketed.
The hon. Gentleman also asked me about special needs. I emphasise that none of the obligations placed on local education authorities by the Education Act 1981 was changed by the Education Reform Act 1988. Indeed, we have slightly modified local management of schools this year to allow local education authorities a little more scope

to ensure that resources are available for statemented pupils—and, indeed, some others—when they are delegated at school level.
My hon. Friend the Member for Wyre Forest (Mr. Coombs) spoke eloquently of the need for simple and practical testing and asked me specifically about the HMI review for staff. That review has now been concluded and we are studying the results.
My hon. Friend the Member for Buckingham (Mr. Walden) referred to the LINC materials. I agree that they were an absurd waste of the £21 million that was devoted to them. We have already decided that they should not be sent round schools; my hon. Friend, however, was especially anxious that they should not be circulated round teacher training colleges and institutions. Let me reassure him and my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) that we are taking a long, hard look at teacher training generally and specifically awaiting the results of the inquiry carried out by the Council for the Accreditation of Teacher Education into the way in which the teaching of reading is taught in teacher training colleges.
I was disappointed that the hon. Member for Leeds, Central failed to respond to any of the challenges that I offered him. He waffled on the subject of nurseries, giving no dates, no commitments and no promise that the pledge on nursery education contained in Labour's document would be implemented. All that we had were pious hopes —and we know what happens to pious hopes when Labour are in government.
The hon. Gentleman also made a disgraceful attack on the integrity of the new leaders of the National Curriculum Council and the School Examinations and Assessment Council. Everyone else in the education world will wish the two new appointees well: they face an enormous challenge —to ensure that our curriculum and the testing are introduced and implemented sensibly and in a manageable form, school by school.
I outlined to the hon. Gentleman, case by case, the catalogue of intimidation, harassment and non cooperation that the city technology colleges and grant-maintained schools have had to endure since their establishment. He refused to repudiate what I had said or to give any undertaking that his party would urge the Labour-controlled local authorities that are responsible to change their policies. We received a clear message today that there is to be no change in labour's policy. Labour remains committed to eliminating choice, wiping out the city technology colleges, re-Integrating the grant-maintained schools and abolishing the assisted places scheme. It remains committed to defending the bureaucracy and giving LEAs back their monopoly; and, above all, it remains committed to fudging our educational standards. The Labour party wants certificates for all and the end of the well-established A-level. So be it. The Government will ensure that the country hears that message loud and clear. We aim for higher standards through wider choice and greater parental accountability. The Labour party has made it clear that it would replace choice with control and would entrust standards to the same bureaucracy that has already failed to deliver them.
In the 1990s, education is becoming a growth industry, as home ownership did in the late 1970s and 1980s. There is a growing appetite for more and better qualifications at every level. Only the Conservative party has the policies in place to ensure that that appetite is properly satisfied.

Mr. Neil Hamilton: I beg to ask leave to withdraw the motion.

Motion by leave, withdrawn.

SITTINGS OF THE HOUSE

Ordered,
That—
(1) this House do meet on Thursday 25th July, at half-past Nine o'clock;
(2) notwithstanding the provisions of paragraph (1) of Standing Order No. 17 (Time for taking questions), no Questions shall be taken, provided that at Eleven o'clock Mr. Speaker may interrupt the proceedings in order to permit Questions to be asked which are in his opinion of an urgent character and relate either to matters of public importance or to the arrangement of business, statements to be made by Ministers, or personal explanations to be made by Members; and
(3) at Three o'clock Mr. Speaker do adjourn the House without putting any Question, provided that the House shall not adjourn until Mr. Speaker shall have reported the Royal Assent to any Acts agreed upon by both Houses.—[Mr. Neil Hamilton.]

Bank of credit and Commerce International>

The Chancellor of the Exchequer (Mr. Norman Lamont): With permission, Mr. Speaker, I should like to make a statement about the Bank of Credit and Commerce International. My hon. Friend the Economic Secretary informed the House on 8 July of the action taken by the Bank of England and the supervisory authorities in a number of other jurisdictions to secure control of the assets of the Bank of Credit and Commerce Group. Subsequently, in the course of our proceedings on the Finance Bill, last week my hon. Friend answered points put to him by a number of hon. Members. The Governor of the Bank of England has met a number of Members to explain the background and reasons for the action, and I met the hon. Member for Leicester, East (Mr. Vaz) and a group of other hon. Members yesterday to discuss the matter.
The immediate priority following the closure has been to bring about as orderly a rundown of the bank's operations as possible to help the many individuals and businesses which had accounts at the bank. I can assure the House that we are doing everything that we can do to resolve their difficulties. In particular, the Bank of England is putting an enormous effort into bringing the deposit protection scheme into action as soon as is humanly possible. The Deposit Protection Board will be writing to depositors immediately, inviting them to make claims. Our latest estimate is that the United Kingdom branches at the bank had some 50,000 sterling accounts, although some customers may have had more than one account. The arrangements to make payments cannot commence until the winding-up order has been granted, but the bank has obtained an expedited hearing for the order which is to take place on Monday. Once the order has been granted, the board will act as quickly as possible to meet valid claims.
As my hon. Friend the Economic Secretary has explained, the provisional liquidator, the Bank of England, and the main high street banks have put in place arrangements to aid the banks in assessing applications by BCCI customers for alternative facilities. I am glad to hear that a number of the high street banks have set up special centres for dealing with applications from such customers and I hope very much that they will be able to respond helpfully in these cases.
The Bank of England and the liquidator have also kept in close touch with the majority shareholders in BCCI to seek their co-operation in securing an orderly rundown of the company and to minimise losses to depositors.
Looking further ahead, the Government and the Bank of England will be considering carefully what lessons this case has for the system of banking supervision in this country and for the framework of international co-operation among banking supervisors.
A number of questions have been raised both in the House and elsewhere about the events leading up to the authorities' action on July 5. In particular, it has been suggested that the Bank of England ought to have taken action earlier to seek the closure of BCCI. Others have argued that it acted prematurely and should have sought the co-operation of the shareholders in restructuring BCCI


and putting it on a sound footing. There have also been questions about the Government's role in the affair although, as the House knows, under the 1987 Banking Act the supervision of banks is unambiguously the duty of the Bank of England and not of the Government.
My hon. Friend in his earlier statement set out the general grounds for the Bank of England's action and for its timing. However, in the light of widespread public concern, the Governor and I have agreed that there should be an independent inquiry into the supervision, under the Banking Acts, of the Bank of Credit and Commerce International, to establish the facts and to make such recommendations as arise from them.
The report will be made public subject to such restrictions as may be needed to avoid prejudicing any criminal proceedings and subject to the provisions of the Banking Act.
I will announce shortly the precise terms of reference of the inquiry and who will conduct it.
I should like to make it plain that the establishment of the inquiry is not to be taken as a criticism of the Bank of England. I have no reason to doubt that the Bank acted properly and promptly in the best interests of the depositors. Unfortunately, it will never be possible to prevent fraud and deceit. None the less, both the Governor and I believe that an independent assessment of the case is appropriate and I hope that all those who have evidence bearing on the matter will co-operate with it fully.

Mr. Gordon Brown: I thank the Chancellor for his statement. I welcome the Government's agreement to an inquiry, for which we have been calling in the past week, particularly in the letter from my right hon. Friend the Leader of the Opposition to the Prime Minister.
Will there be an interim report on the inquiry? Should not the inquiry's remit and the published report include —this is not yet in the remit—whether current regulatory procedures provide adequate protection to the customer, whether banks should have a statutory responsibility themselves to insure customers' deposits, what the role of auditors has been in this sorry affair and—this, too, is not included in the remit—what has been the Government's role? Does the right hon. Gentleman accept that, as well as questions about the supervision of banking, there are questions which must and, indeed, can be answered immediately on the Government's role in this affair?
Will the right hon. Gentleman tell us when Ministers first knew of the problems at BCCI, what they knew, what action was taken and, if no action was taken, why not? Will he explain why no action was taken after prosecuting authorities in America asked the Bank of England for assistance over BCCI, why no action was taken after BCCI pleaded guilty in the United States in January 1990, why no action was taken after the Federal Reserve Board asked for help in its inquiries and, especially, why no action was taken after the Price Waterhouse report 14 months ago? Will the right hon. Gentleman confirm that the Prime Minister was Chancellor at the time when written warnings were first given to the Treasury and that if mistakes are found to have been made Ministers will accept full responsibility for what has gone wrong and will not shift the blame to junior officials?
Will the right hon. Gentleman explain why the Treasury ignored warnings in the letters of 12 June and 19

June 1990, one from an inspector at BCCI about a possible fraud? Will he now tell us why Government Departments have engaged in the unseemly episode of buck passing from the Treasury, to the Department of Employment, to the Department of Trade and Industry, where its "couldn't care less" attitude means that the letter appears to have disappeared, so that while Ministers were losing letters, small and large investors were losing thousands of pounds? Will the right hon. Gentleman explain what actually happened? Will he confirm—I want a specific answer—whether, when the bank applied to the Investment Management Regulatory Organisation for a full licence as an investment manager, it was turned down as long ago as April 1990—the only applicant to be turned down? Should not that have been the cause for alarm bells to ring over the bank's activities?
Does the right hon. Gentleman now agree that the Prime Minister was not only unfair but wrong to prejudge events when he attempted last Thursday in the House to shift the blame to local authorities for being imprudent? Does the right hon. Gentleman accept that local authorities and small investors, including hundreds of business men and women—some now at risk of losing not only their bank but their businesses—cannot be held to blame if the failures are found to be those of communication between Government Departments and of inadequate regulation? Will the right hon. Gentleman now explain in more detail what practical steps are being taken to help small investors in difficulty and to help small businesses facing hardship? Will he demand an urgent review of the compensation scheme currently being offered by the banks? Does not he agree that this is a sorry and shameful episode of a Government slow to act and even slower to come to the aid of small investors, quick to blame others and even quicker in passing the buck among themselves?

Mr. Lamont: I am grateful to the hon. Member for Dunfermline, East (Mr. Brown) for at least welcoming the fact that the Government have decided to set up an inquiry to examine the lessons that may be learnt from this affair. However, his remarks might have been more complete if he had referred to the massive, unprecedented fraud on a worldwide scale which is the real source of the problem facing us and the many other people who have lost money as a result of this sorry episode.
The hon. Gentleman raised the issues of regulatory procedures, the terms of reference and the role of auditors. I shall, of course, make the House aware of the terms of reference and I intend that the investigation should be able to examine the issues raised by the hon. Gentleman. I know that he never wants to make political points, would never wish to exploit matters and always wishes to be fair, so I am sure that he will bear it in mind that, statutorily, the responsibility for banking supervision rests, as I said fairly in my statement, with the Bank of England.
The hon. Gentleman mentioned what happened in the United States. The Bank of England made a judgment having considered the facts of what happened in the United States. It concluded that what had happened there was a local matter—[Laughter.] I may also say that that was the view taken in the United States. Other agencies remained open in the United States and no branch of BCCI was closed down. The judgment had to be made by the Bank of England. That matter can be examined by the inquiry, as can the issue of whether alarm bells should have


been ringing earlier, as he put it. Those issues can and will be investigated by the inquiry. I shall make an announcement to the House about the terms of the inquiry. As I said, we intend its findings to be made public.
As for the compensation scheme, we have already made it clear in the House what the position is. My hon. Friend the Economic Secretary to the Treasury made a statement about that, and I have nothing to add.

Mr. Terence L. Higgins: Does my right hon. Friend accept that the Treasury and Civil Service Select Committee will wish to consider the timing and the extent of its own inquiry in the light of his statement? Will he clarify several issues? First, what is the timing of the inquiry likely to be? Are its hearings likely to be public? As for the terms of reference, are they likely to be narrow or will they cover the whole range of subjects which he mentioned? Will the judicial inquiry have access to the auditors' reports which would otherwise be restricted under the Banking Act 1987? Will the composition of the inquiry be such that it can make recommendations on matters that go far beyond legal considerations with regard to the broader issues of international and general banking supervision?

Mr. Lamont: On the timing of the report, I should hope that the conclusions could be arrived at as speedily as possible, but we must be realistic. This is a highly complex matter, but I am sure that it is right for the inquiry to be set up and conducted as soon as possible.
On recommendations about the supervisory regime, we shall of course look to the inquiry to see what it says about the regime and, indeed, that is one of the purposes of setting up the inquiry.
As for the type of inquiry, I have not yet decided under what powers the inquiry will be conducted. Of course, that affects whether or not the proceedings will be held in public. I will report to the House on that matter.
I omitted to reply to one important point made by the hon. Member for Dunfermline, East. He referred to letters received in Government Departments and to a letter received in June 1990 in the Treasury, which was passed to the Department of Employment because it enclosed a letter addressed to the Department of Employment. The correspondence also drew attention to the losses made by BCCI which had already been published in audited accounts. The letter contained unsubstantiated allegations about corruption similar to those that had already been made. The Bank of England, received a similar letter shortly after the Ambrose correspondence was replied to. That was passed to Price Waterhouse. The Treasury heard a number of similar allegations and rumours over the period in the House and from other sources. Those allegations were, of course, passed to the Bank of England.

Mr. Menzies Campbell: Does the Chancellor understand that although his statement may have satisfied uncritical loyalists, it will not have satisfied public opinion or the hapless depositors who have lost money? Why is the inquiry that he proposes so restricted in scope? Why does he not establish a comprehensive inquiry under a High Court judge under the terms of the Tribunals and Inquiries Act 1971? If such an inquiry were to establish incompetence on the part of Government or the Bank of England, would not it be right for him to undertake that all depositors would be fully compensated?

Mr. Lamont: I have already told the House that we have to make a decision on the powers under which the inquiry will be conducted. The House has been pressing for an inquiry and I hoped that hon. Members might have welcomed it warmly. Of course, unfortunately, the setting up of an inquiry cannot solve the many problems that have arisen from this very unhappy and very sorry affair in which we have seen fraud on a massive and probably unprecedented scale, and on a worldwide basis. We face a very difficult situation, as do many small business men. It is right to stick to the position that Parliament has laid down and it is important, as the House has said, to establish the facts of what has happened in this case.

Sir Geoffrey Finsberg: As the headquarters of the bank is in Luxembourg, does it not make one consider again the problems of a European central bank? The regulations in Luxembourg are so minimal as to be laughable. Is my right hon. Friend aware that I have a substantial number of Asian constituents, many of whom have telephoned me to complain that the Liberal Democrats and socialists are making party political capital out of their misery?

Mr. Lamont: I note my hon. Friend's point. It would be very regrettable if people just seemed to exploit a very unfortunate situation to make party points.
My hon. Friend referred to Luxembourg and other European supervisors. I hope that he will bear in mind, before he makes any criticism of them, the evidence that we have that this was an extremely sophisticated fraud and was extremely difficult to detect. My hon. Friend is quite right that there are matters that come out of this which raise questions about the international regime. I do not think that what has happened in this case enables us just now, before we have the results of the inquiry, to be critical about the EC regime post-1992. The EC banking directives then will be established on the basis of common high standards of supervision in the Community and on closer co-operation between supervisory authorities in member states. Again, these are issues that we shall want to consider when we have the results of the inquiry.

Mr. Stuart Bell: I am grateful to the Chancellor of the Exchequer for coming to the House this afternoon to make a statement and announce an independent inquiry. Will he confirm that, under the Banking Act 1979, BCCI was a licensed deposit taker only and that from 1987 it became a full bank under the Bank of England? Will he also confirm that, although the Banking Act 1987 gives the Bank of England responsibility to supervise banks, it is nevertheless answerable to Parliament?
Will the Chancellor also confirm that the terms of reference of the inquiry will enable the inquiry to have power over persons and to interview the former Chancellor of the Exchequer, the former and present Secretaries of State for Trade and Industry and the present Secretary of State for Employment? They were all in the Cabinet at some stage and had responsibility for their Departments when they received a letter from the banking inspector of BCCI—not merely from a person in the street —who drew attention not only to the loans to which the Chancellor referred but to corruption. What happened to the letter once it was received by the Department of Trade and Industry?

Mr. Lamont: On the first point, I confirm that BCCI was established as a licensed deposit taker in 1979 and then became a full bank in 1987. The hon. Gentleman is also right to stress that although the supervisory authority is the Bank of England, the House is entitled to and will rightly ask questions about those matters. That is why the Governor of the Bank of England will go to the Select Committee next week. As head of the supervisory authority, he will be able to give a full account of the matter, in so far as he can under the restrictions of the Banking Act 1987. I am sure that the hon. Gentleman would not wish any possible criminal proceedings to be compromised in any way. However, I am sure that the Governor will want to assist Parliament in every way that he can.

Mr. Tim Smith: Will my right hon. Friend confirm that when Parliament agreed, only four years ago, to the Banking Act 1987, it made a clear distinction between the roles of the Treasury and the Bank of England. Prime responsibility for banking supervision lies with the Bank of England. Therefore, is it not right that the inquiry, which I welcome, should focus on the role of the Bank of England?
Does my right hon. Friend agree that not a shred of hard evidence has yet been adduced by any critic on the Opposition Benches or elsewhere to show that the Bank of England acted other than competently? That is confirmed by the fact that some people say that it acted too slowly while others say that it acted too quickly.

Mr. Lamont: I am grateful for my hon. Friend's comments and agree with what he says. No evidence has been produced to suggest that the Bank of England, in a very difficult situation, did not act promptly and competently. However, because I am fully aware that strong concerns have been expressed by hon. Members, I feel that it is right to respond to them and set up this inquiry. It is not sufficient simply that the duties of the Bank of England should be competently discharged; they must be seen to be competently discharged.

Mr. Max Madden: Does the Chancellor understand that it would be much better to have no inquiry at all than a cosy little inquiry, limited in its terms of reference, designed to bury this nasty scandal until after the next general election? Will he, therefore, urgently reconsider the widest terms of reference to enable a full investigation of the roles of the Bank of England, the Treasury, the Department of Trade and Industry and the Department of the Environment, including Ministers? We are now faced with a bank within a bank, and massive fraud and corruption largely based in the United Kingdom. Many people are wondering why there have been no arrests or charges and why no one even seems to be helping the police with their inquiries.
Will the Chancellor ensure that the Price Waterhouse reports of last October and June are published immediately? The Governor said last night that they have been made available to a number of people, with deletions to avoid identification and possible legal repercussions and there is no reason why they cannot be published. Does the right hon. Gentleman understand that there is mounting suspicion that the Government, including the Prime Minister, failed to act on the matter last year so as to smooth the succession in the leadership of the

Conservative party? Does he understand that no action was taken at the beginning of this year to ensure that Arab unity was maintained prior to the Gulf war?

Mr. Lamont: This is a serious matter and I am afraid that the hon. Gentleman injects a tone of farce into the proceedings. The hon. Gentleman came and discussed the matter with me in the Treasury and was fairer in that meeting than he chooses to be in public. He is wrong to say that we are setting up a "cosy" inquiry. We do not intend or want anything to be covered up. It is in the public interest that we should have an inquiry. It should be as full as possible, and as much as possible should be published. That is my objective.

Mr. Patrick Ground: Does my right hon. Friend agree that the primary responsibility for running BCCI lies with the owners and management of the bank? In relation to the advertisements that have appeared today, is it still open to the Sheikh of Abu Dhabi to provide funds to meet the deficit, particularly for the protection of small deposit holders? A number of us heard yesterday evening from the Governor of the Bank of England that small deposit holders who were protected were unlikely to receive payment until at least four weeks after the winding-up order. Will my right hon. Friend explore with the Governor of the Bank of England and others involved whether that period can be shortened?

Mr. Lamont: I will pursue that matter, but I doubt whether the period can be altered very much. The Bank of England has chosen to press ahead with the liquidation. That is the judgment that it has made in the light of the evidence it has about the extent of the fraud in this case.

Mr. Brian Sedgemore: Is the Chancellor of the Exchequer aware that, when I used to sit on my mother's knee, she used to say, "Brian, If ever you have billions of dollars to spare, whatever you do, don't invest it in a fraudulent bank"? That being so, can the Chancellor think of any conceivable motive why the Sheikh of Abu Dhabi invested vast sums of money in a fraudulent bank, when he and his advisers must have known, like the rest of us, that it was fraudulent? Will the Sheikh be invited by the inquiry to submit himself to cross-examination? Should the inquiry find out that the Prime Minister, other Ministers and the Governor of the Bank of England were partially negligent in this affair, can the Chancellor assure us that both individual depositors and local authorities will be bailed out by the Government?

Mr. Lamont: On the question of what the implications would be if maladministration were found or criticisms were made, I have said to the House that I have no reason to think that the Bank of England has not discharged its role and duty properly and competently. If other evidence came to light, I would then have to consider the implications of that. The matters raised by the hon. Gentleman relating to the Sheikh of Abu Dhabi are not for me; some of them could conceivably be part of the inquiry.

Sir John Wheeler: Does my right hon. Friend accept that the decisive satement that he has made today will be particularly welcome because the independent inquiry will identify a worldwide fraud on a massive scale and probably raise significant implications for banking regulation on a worldwide basis? Will he do


his utmost to ensure that the inquiry is so constructed that those who give evidence to it will not be immune from criminal proceedings in the United Kingdom?

Mr. Lamont: I note my hon. Friend's last point. I am sorry that I have to keep repeating to the House that we are considering the powers under which the inquiry will be set up. That matter has a bearing on various others. I entirely agree with my hon. Friend's first point, that there may be implications for the international supervisory regime and the co-operation between national Governments. We shall listen carefully to what the inquiry says and to the conclusions that it draws.

Dr. Norman A. Godman: The finance officers of the Western Isles council—one of the four Scottish local authorities caught up in this scandalous affair—committed a grave error of judgment in their reward/risk decisions about this bank. However, they were culpably misled by their brokers, who should surely be investigated. Will the Chancellor urge his colleagues at the Scottish Office sympathetically to consider the request by Western Isles council for additional borrowing consent? If the Secretary of State for Scotland agreed to that request, the burden inflicted on all the people of the Western Isles would be eased to some extent.

Mr. Lamont: I note what the hon. Gentleman says about the position of that local authority. Comments on that have already been made by the Secretary of State for the Environment and the Minister for Local Government. The hon. Gentleman spoke about the role of the brokers. I shall examine what he said, but I do not think that that is a matter for the inquiry.

Mr. David Sumberg: I warmly welcome my right hon. Friend's statement and congratulate him on coming so promptly to the House to say what he found. I urge him to include the role of local authorities in the inquiry's terms of reference. Unfortunately, my local authority in Bury did not take Brian's mum's advice, but invested the staggering sum of £6·5 million in BCCI in 1988. My constituents are angry about that and want to know from the council's Labour leadership why they did it. The inquiry would be an ideal way to find out.

Mr. Lamont: I note what my hon. Friend says. No doubt that his observations have considerable force, but I do not think that the behaviour of local authorities would be a suitable subject for the inquiry. The inquiry will be into what has happened, particularly with regard to the supervisory regime as it applies to banks. It would be a mistake for the inquiry, which will, I know, be looking into an extremely complicated matter, to go wider than that.

Mr. Donald Anderson: The Chancellor must allay the suspicion that for political reasons the Government will want to play this long to overload the inquiry's terms of reference. This is a complex matter and might get entangled in sub-judice rules. To allay that suspicion, will he consider detaching from the main part of the inquiry those elements that are specifically referrable to the letters of June last year, which have clearly precipitated today's hasty decision? Will it look specifically at the role of the Treasury and the Department of Trade and Industry which, when it is not leaking letters, appears to be losing them?

Mr. Lamont: The hon. Gentleman accuses me of having political motives, but his motives in his questions seem a little suspect. I assure the hon. Gentleman that we have no motives such as he ascribes to us. It is in the public interest for there to be an inquiry and it is also in the interests of the supervisory authority, the Bank of England. I have confidence in the Bank of England, but I also think that it is right to have this inquiry. Obviously, it will look at the role of the supervisory authority, but it will also look at the role of the Government.

Mr. Neil Thorne: Does my right hon. Friend agree that allegations by the Opposition about letters being lost between Government Departments is a red herring, because all this information was already known to the Bank of England and it was for that Bank and not for the Government to take decisions? Will my right hon. Friend take this opportunity to say that the junior staff of BCCI are hard working and honest? In their difficult task of finding new employment, we should not allow them to be tainted by what has happened with their superiors. We should be giving those hard-working people every encouragement to make a new start elsewhere, because they are excellent employees, of the sort that should be snapped up by another bank.

Mr. Lamont: It is excellent that my hon. Friend has made that point. Many tragedies arise out of this affair, among which are the bank employees who have lost their jobs and face uncertain prospects. It would be monstrously unfair if they were tainted because they had worked for BCCI. I hope that everybody outside the House will note what my hon. Friend has said. I have said all that I wish to say about the letters. I do not believe that the letter to which we were referring contained something material that was not already in the public domain.

Mr. Peter Shore: Given the content of the June 1990 Price Waterhouse report, which led to the president and chief executive of the bank resigning when they received a copy of it, it would have been a scandal if the Chancellor had not announced today a wide-ranging inquiry into the events that led to this disgraceful situation. Will the Chancellor answer some of the questions that he has so far failed to answer? First, will the inquiry have the power to summon before it Ministers and ex-Ministers who may be able to contribute to an understanding of what has happened? Secondly, if there is any serious finding of blame or of negligence or failure to carry out their duties by those who are charged with the invigilation of banks, will he say that the depositors of the bank will be fully and amply compensated?

Mr. Lamont: The right hon. Gentleman's last point is the same as that made by the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore). I said that I would have to consider the position if the conclusion was that blame applied to the authorities or individuals, or there were findings of negligence. Plainly, we would then have to reconsider the matter, as happened with the case of Barlow Clowes. I assure the right hon. Gentleman—he would not expect anything less—that Ministers will co-operate fully with the inquiry. It is in the interests of Ministers that there should be an inquiry.
The right hon. Gentleman also referred to the resignation of the president and chief executive of the bank. That is a fact. Unfortunately, it did not prove to be


the turning point or the end of the matter, as was hoped at the time. I understand that the idea was that restructuring and a new injection of capital would enable the bank to be able to continue as a thriving organisation. That emphasises how important it is to have this full inquiry and to get to the bottom of the facts of what happened.

Sir Peter Emery: I thank my right hon. Friend for coming, at the close of play of the week, the moment that he decided that an inquiry should be conducted, to announce it to the House. We should all be pleased about that. Will my right hon. Friend look at the terms of reference to ensure that, when they are decided, they do not limit, legally, the provisions of the Banking Act 1987 in relation to the deposit protection scheme and therefore will not limit payment under that Act? We would not want the inquiry to limit the provisions of that Act. If the criticisms of Opposition Members of Parliament were analysed carefully, would not the logic of them be that if they do not like the Bank of England carrying out this task, the only alternative is for the Treasury to be the inspector? Do they believe that that would be any better or more reasonable? I would find it terrifying if the Treasury were the banking inspector for England.

Mr. Lamont: It might be terrifying to my hon. Friend, but it is also a pretty terrifying prospect for me. I think that he is right in the conclusions that he has drawn. The 1987 Act was drawn up after prolonged and careful consideration and study of the regimes in other countries, and I am sure that it is right to place the responsibility with the Bank of England.
I entirely accept what my hon. Friend said about the terms of reference and the need not to cut across any compensation that will be paid to depositors.

Mr. Keith Vaz: I welcome the inquiry, but does it not represent an implied criticism of the Bank of England? At 8 o'clock yesterday evening, the Governor informed hon. Members on both sides of the House that he felt that an inquiry—a public inquiry, an independent inquiry—would be unhelpful to the depositors and to the liquidator. Will the Chancellor of the Exchequer tell us what he has said to him in the past 15 hours that has managed to change his mind?
The Governor told Members of this place that in regard to the report in October 1990 he kept the Chancellor of the Exchequer fully informed. The Chancellor at that stage was the present Prime Minister. He told us also that on 28 June, at a special meeting at Downing street, which the Chancellor and Prime Minister and the Governor attended, he informed them that there was to be a closure of the bank. In view of what the Sheikh of Abu Dhabi said today, does not the Chancellor bitterly regret not contacting him to see whether anything could have been done to bail out the bank before it closed?
Has this not been a fiasco of lost letters and missed opportunities? Does not the Chancellor think it important that we have a timetable for the inquiry before the recess? Will he confirm that he will be in the House on Monday to reply to the debate on these matters?

Mr. Lamont: As regards the most important point, which the hon. Gentleman raised with me when we met —whether there should have been an attempt to get the

Sheikh of Abu Dhabi to put more money into the bank before it was closed down—that was obviously something which the Bank of England considered. However, as I have emphasised to the House, when the report was received it contained evidence—I can say only that, unfortunately, I am not free to say very much to the House about it—of massive and widespread fraud. In considering the conclusions of that report, it was the Bank's view that the bank should be closed down. That is a matter for the Bank of England and it is a judgment that no doubt the independent inquiry will also want to examine.
As for the dates, and when I and my right hon. Friend the Prime Minister knew about the discovery of fraud, I was informed in general terms that fraud had been uncovered on 26 June. I was given some details of the section 41 report on 28 June, and the Treasury sent a report to No. 10 on 28 June. The final decision was taken on 4 July. On the first point that the hon. Gentleman raised, that this does not imply a criticism of the Bank of England, I discussed this fully with the Governor, and he has agreed with our conclusion. I believe that it is in everybody's interest that we have the investigation.

Several Hon. Members: rose—

Mr. Speaker: Order. I will endeavour to call all those who are rising in their places, but I ask them to ask brief questions and not to ask questions which have previously been asked and answered.

Mr. Anthony Nelson: I join in welcoming the announcement made by my right hon. Friend that an inquiry will be set up. Many of us are confident that it will show beyond any question of doubt that the Government and the Bank of England acted wholly in a timely and proper fashion. Does my right hon. Friend agree that in some instances there is a substantial difference, when exercising a statutory responsibility to close down businesses, between rumour and suspicion on the one hand and firm evidence on the other? Does he agree also that it is impossible to construct banking legislation on the basis that some shareholders in banks shall be informed shortly before a bank has to be closed down? The possibility of haemorrhaging would be unfair to some depositors while giving others an unfair advantage. These are matters that the inquiry should take into account rather than the attitude of the Opposition, who seem to want to undermine confidence in the Government, the Bank of England and the banking system, which amounts to a public disgrace and a political scam.

Mr. Lamont: I am grateful to my hon. Friend. I agree with his second point. Of all the criticisms that have been made, the one that has struck me as a little bizarre is the complaint that the bank had been closed rather precipitately without warning. As my hon. Friend said, that would hardly have been possible in this situation, and is hardly possible in the nature of banking. As my hon. Friend said, and as the Governor has repeatedly said, it is one thing to hear rumours and suspicions, but it is quite another to have the hard evidence on which the regulatory authority can exercise its functions as laid down by Parliament, and as subject to judicial review.

Mr. Alan Williams: Does not the Chancellor recognise that, despite his answer, there is a certain incongruity in his saying that the inactivity of the Treasury and the Bank of England was justified because


the rumours were unsubstantiated, but in the next breath saying that council treasurers and local shopkeepers should have acted on rumours about the rumours? Does he accept that all who have heard his statement today will know that the Governor of the Bank of England has been nominated as an official Government fall guy? Has not the decision already been taken that, if anyone is to hang as a result of the inquiry, the Governor will be suspended and not the Chancellor?

Mr. Lamont: I entirely reject that imputation. I have repeatedly said that I am confident that the inquiry will find that the Bank of England discharged its duties in this matter competently and expeditiously.
On the hon. Gentleman's other point, we have repeatedly pointed out that it is not for the Government, the Treasury or the Department of the Environment to recommend to individual investors where they should put their money. That is a judgment for which each investor is responsible.

Sir Nicholas Bonsor: I very much welcome my right hon. Friend's decision to hold an inquiry, and I hope that it will be both speedy and comprehensive. I ask my right hon. Friend to ensure that it especially considers two matters. The first relates to a point already made by my hon. Friend the Member for Ilford, South (Mr. Thorne), and that is the treatment of the employees. Not only is it important that they should not be tainted by the activities of their superiors, but it must be put on record that they have been treated shoddily since the closure of the bank. For several days they were kept in complete bewilderment about what their future might be and whether they would be paid. I hope that the inquiry will specifically consider the way employees are treated in such circumstances.
The second matter relates to the role of the auditors, which needs close examination. Is it not extraordinary that Price Waterhouse apparently certified the accounts of that company as true and fair, at a time when virtually everybody else who had any knowledge of the company was deeply suspicious about its activities?

Mr. Lamont: As I said, in framing the terms of reference we shall obviously take into account everything that has been said today and other representations that have been made. As my hon. Friend said, it is possible that questions may be raised in the inquiry about the role of the auditors.
A number of my hon. Friends have referred to the difficult time that employees have experienced, but I am afraid that that is a product and a consequence of the terrible and massive fraud that has been perpetrated. Of course, I shall bear in mind what my hon. Friend said about the employees, but it cannot be a matter for the inquiry. On his first point, we shall endeavour to ensure that the inquiry is as speedy as possible, but it will be dealing with a complicated matter.

Mr. Diane Abbott: Opposition Members have listened with interest to the Chancellor's compliments about the Bank of England. We are persuaded that poor Mr. Robin Leigh-Pemberton is now unassailable in precisely the way that the right hon. Member for Blaby (Mr. Lawson) was unassailable before he, too, took a nosedive.
On the question of auditors' reports, for the past two weeks Ministers have insisted that the only sign of fraud

in BCCI, until three weeks ago, was based on rumour. Is not the Chancellor aware that a series of auditors' reports—notably the Price Waterhouse October report commissioned by the College of Regulators—had documented fraud, and specifically a series of billion dollar loans to a clique of Saudi and Gulf so-called business men? Fraud is clearly documented in those auditors' reports. Will they be made public? The Chancellor will be aware that, if the Government are unwilling to make them public, it is within the power of the Treasury and Civil Service Select Committee to call for them.

Mr. Lamont: I will certainly consider the hon. Lady's latter point. Her second point is a matter for the inquiry and I have already answered her first point.

Mr. Ivor Stanbrook: When all is said and done, will my right hon. Friend try to ensure that whoever has to pay for the consequences of the misconduct, it will not be the British taxpayer?

Mr. Lamont: We have said that the existing compensation scheme should operate as it is now constituted under the Banking Act 1987.

Mr. Tony Banks: I welcome the inquiry, in common with other right hon. and hon. Members, but does not the real blame lie with the Government, with their rush towards deregulation in the banking and finance industries, of which crooks and shysters took advantage—just as happened with savings and loans banks in the United States following deregulation under Ronald Reagan? The Chancellor should have learnt some of those lessons. Is not it time to establish an independent supervisory body for the banking industry? Can the Chancellor say when he will announce the inquiry's terms of reference? Will we know of them before the House rises for the summer recess next Thursday? The last thing that anyone—in the House or outside—will accept is yet another cover-up. We do not suddenly want to find that the letters that were lost in the Department of Trade and Industry ended up being used as cigarette lighters by the then Secretary of State, who was under some pressure and about to resign.

Mr. Lamont: I am grateful to the hon. Gentleman for introducing a touch of lightness to the proceedings. Having announced an inquiry in response to popular demand, the last thing of which we can be accused is a cover-up. That is an odd accusation to make. I will announce the inquiry's terms of reference as quickly as I can. The fraud in this case goes back a long time before the deregulatory process began and was perpetrated in many countries—not just the United Kingdom.

Mr. Phillip Oppenheim: Can my right hon. Friend confirm that £17 million of the £23 million deposited with BCCI by the Western Isles council was itself borrowed by that authority on the money markets, not for the purpose of meeting the council's legitimate obligations, but to gamble on BCCI's higher interest rates? If so, does not that call into question the behaviour of too many councils in gambling with their charge payers' money and should not that aspect come within the inquiry's remit?

Mr. Lamont: It is not for me to comment on a particular local authority's investment policy, although no


doubt my hon. Friend's points have a general application. I do not believe that the behaviour of the local authorities concerned should be part of the inquiry, which concerns the fraud at BCCI and the way in which the supervisory regime operated. However, I am sure that my right hon. Friend the Secretary of State for the Environment will consider my hon. Friend's comments.

Mr. Dennis Skinner: Does the Chancellor expect us to believe that for more than 12 months, the authorities could not find out about the drug-laundered money that was slopping about in BCCI, when, only seven years ago, the same Government managed to trace in 48 hours the National Union of Mineworkers' money in Luxembourg and other capitals throughout the world? The Chancellor moves from one squalid, shabby manoeuvre to another. We read in the Evening Standard on the eve of today's statement that Freshfields, the lawyers acting for the Bank of England, are acting also for the liquidators, Touche Ross. That is a direct conflict of interests. It is like a defendant going into court and being told, "You're going to be looked after by the prosecuting solicitor." I tell the Chancellor this—get that conflict removed, or it will be another scandal.

Mr. Lamont: I shall look at that. The hon. Gentleman's first point was really the same as the one raised by other hon. Members, and I can only tell him what I have told them—that we are setting up the inquiry precisely to investigate whether the fraud could or should have been discovered earlier.

Mr. Nicholas Brown: A number of questions remain unanswered. Let me mention three of them.
First, can the Chancellor confirm that, on 28 April 1990, IMRO decided that those who were running BCCI were not fit and proper people to have an IMRO licence? I understand that they were the only people who were subject to such a decision. Surely, if that was the case, the Government would have known about it.
Secondly, can the right hon. Gentleman confirm that, if necessary, the inquiry will produce an interim report, bringing as much information as possible into the public domain? Thirdly—although we were reassured to learn that Ministers wished to co-operate with the inquiry—a key question has not yet been answered: what did Ministers know, and when did they know it? I do not know whether the Chancellor has been able to consult his colleagues at the Treasury and to ask them whether they knew that allegations were being made by letter last year, but he could at least make a start and tell the House what he himself knew, and when he knew it.

Mr. Lamont: I have already told the House what I knew. As for the hon. Gentleman's second question, we can consider the possibility of an interim report when we announce the terms of the inquiry to the House. The matters that the hon. Gentleman raised in his first question—about IMRO and 28 April 1990—are for the inquiry to consider. We are setting it up to investigate whether IMRO's decision should have been taken into account.

Peace Train (Northern Ireland)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]

Mr. Harry Barnes: It seems that, far from needing to do away with Friday sittings, we require all the available time to complete our business. A number of hon. Members have arrived in the Chamber; if the Minister does not object, I am happy to allow them to speak as well.
We have discussed some momentous events today. We have heard a statement by the Prime Minister about the G7 summit, and another by the Chancellor of the Exchequer about BCCI. Although fewer hon. Members are present now, we are about to discuss another important item.
For the past two years, the peace train has run between Dublin and Belfast. This year, it has travelled from Belfast to Dublin and then, on the "immigrant route", through Holyhead to Euston. It arrived here today, and we have had a meeting in the Grand Committee Room and a press conference in the Jubilee Room to mark the occasion.
The peace train was first run in 1989, and then in 1990, between Dublin and Belfast. It constitutes a protest against the continuous IRA destruction of rail services. The aim is to push goods on to the road so that extortion rackets can be operated. British troops and others face considerable danger in clearing the line. The peace train is a protest against that and against the prospect of job losses on the railways, which have almost been in danger of folding up as a result of the paramilitaries' activities. It is also a symbol of the growing peace movement—a protest against all forms of paramilitary activity in, and emanating from, Northern Ireland, no matter whom they involve. It is the IRA that has disrupted the railways, but it must also be made clear that action by Protestant paramilitary groups is entirely unacceptable. There should be no ambiguity in our condemnation of the acts of intimidation and violence in which paramilitary groups are involved.
The people who support the peace train do so irrespective of their views on the border, and irrespective of their political differences on other matters. They are united in saying that such matters should be dealt with through the normal political processes of democracy, participation and involvement. The movement has quickly gained momentum, and both its support and the scope of its activities have grown.
The peace train left Belfast at 11 am yesterday and, following a ferry crossing, finally arrived at Euston at 7.14 am today. The people on the peace train then boarded two double-decker buses with open tops and came to Westminster. The buses were driven by an Irish Catholic and a Northern Ireland Protestant, to demonstrate unity. We had a fantastic rally in the Grand Committee Room and an effective press conference in the Jubilee Room. Moreover, at Euston, we heard a telling expression of views by a broad range of people, some of whom I shall mention later.
The peace train's activities have been extended to Britain because the IRA has been involved in attacking railway targets here. There were deaths at Lichfield and Victoria, and bombings at Paddington. A section of line was taken out at St. Albans and there is regular disruption of morning rail services. It seemed entirely appropriate


that activities that had been effective in Ireland and Northern Ireland should be extended to this country to show that we are not prepared to knuckle under in the face of paramilitary activity here.
Both the railway unions in all the areas concerned and British Rail have been fantastically co-operative and have assisted us greatly.
The train is not merely a protest against the disruption of the railway: it is a symbol of the need for the British public to understand the strength of cross-community feeling for peace in Northern Ireland. There are hosts of initiatives and people are bravely standing up in the face of threats and violence.
The growth of the peace train movement is manifest. Its patrons include members of 16 different political parties in Northern Ireland, the Irish Republic and 0Britain. At the moment, they include at least 50 Members of this Parliament—I am sure that many others would wish to be associated with it—from four political parties—the Labour party, the Conservative party, the Liberal Democrats and Plaid Cymru, and I am sure that we shall add others to the list.
The peace train movement was sponsored by student bodies, trade unions from both sides of the water, church leaders of different denominations, actors, journalists, singers and so on. The poster that was produced shows that there are some 400 patrons from about 75 organisations, some of whom act in their own capacity. The patrons include Mary Robinson, the President of Ireland, who about a fortnight ago hosted a meeting in Dublin with peace train activists, in which I was privileged to be involved.
Support for the peace train goes beyond that of the published names of patrons, and includes the Secretary of State for Northern Ireland, who wrote two letters in support, the Foreign Secretary, and the Taoiseach, Charles Haughey, whose message of support was read out at today's press conference by someone from the Green party acting on his behalf. That shows the wide support for the peace train—a Fianna Fail Prime Minister handing material to someone from the Green party. In addition, a message from you, Mr. Speaker, was read out at the conference.
Many Northern Ireland figures support the peace train movement, including the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis). There is also support from other peace organisations in Northern Ireland, including Families Against Intimidation and Terror. That organisation was set up by Nancy Gracey, who came back from the seaside one day to discover that her son had been knee-capped.
Much of the violence in Northern Ireland is not cross-community violence but involves IRA violence against Catholics and Protestant paramilitary violence against Protestants. It is difficult to operate the writ of law in some areas, and the IRA and the Protestant paramilitaries operate their own crude techniques. Nancy Gracey stood up and said that that should not happen. She developed an organisation which has wide support, including from. within Protestant communities. She came to a meeting at the House, and the group who came included three Protestants and two Catholics.
An impressive speaker this morning from Families Against Intimidation and Terror was Maurice Healy, an IRA terror victim who was under a death threat and was excluded for a long time from Northern Ireland. FAIT

took up his case, campaigned and issued leaflets, and the death threat was lifted. That organisation has campaigned also in connection with Mickey Williams.
Other groups include Enough is Enough and Consensus. I have the honour to chair the British section of New Consensus, but it operates also in Northern Ireland and Ireland. It has specific ideas on devolved government, a Bill of Rights and integrated education. Trade unions in Northern Ireland are involved in the "Hands Off My Mate" campaign, which is highly effective.
Given the failure of the Brooke talks, the peace train and other peace movements are welcome. They are helping to change the climate of Northern Ireland politics and will increase the likelihood of successful group talks. Those movements have an impact on the politicians who will be involved in such talks.
I have not had time to mention many other cross-community activities. The glamorous, publicity-conscious activities of the peace train are important, but there are also those working in communities and Churches who draw together people in both communities and who work hard, in an unsung way, to tackle problems. We must be unambiguous in rejecting intimidation and violence, death threats and deaths and bombings. We must say to those who are involved in those activities, "You must do as others in Northern Ireland have done. You must reject that technique and return to the use of parliamentary activity and pressure and to legitimate methods."
Those who believe in a united Ireland and those who believe in maintaining the border have legitimate views, but they must follow certain methods, however hard they struggle. Sometimes, democratic and civil liberty arrangements might need to be extended to ensure that that occurs at a greater rate, but that needs to be done forcefully and well. Ireland—north and south—is a fantastic place, but in places such as Belfast, and especially in working-class areas, there is a solid sectarian divide and barriers between the areas. Sectarian street signs divide people, yet the people in working-class areas where there is massive unemployment are the very people who need to work through the normal democratic institutions to improve their lot.

Mr. Stuart Bell (Middlesborough): I am grateful for the opportunity to lend my support to my hon. Friend the Member for Derbyshire, North-east (Mr. Barnes) and to congratulate him not only on choosing the subject of this Adjournment debate but on the fact that it coincides with the arrival of the peace train from Northern Ireland in Dublin, from where it will cross to Britain.
At the end of the first world war, Winston Churchill said that when the rigours of war were over we could still see the spires of Fermanagh and Tyrone beyond the mists, but the problems of Ireland to which he referred are still with us. The fact that they are still with us is no fault of the constitutional politicians who seek to resolve the issue through, for example the recent so-called Brooke initiative inaugurated by the Secretary of State for Northern Ireland and the work carried out consistently by Members of Parliament which, as my hon. Friend said, is often unsung and in most cases unknown.
About six weeks ago, I took a party of Irish Members of Parliament from Dublin into the Stormont buildings in the north. It was an historic breakthrough in cross-border


co-operation because it was the first time that Irish Members of Parliament had been to the former Stormont Parliament. The visit was achieved with the full co-operation of the Northern Ireland Office and other Ministers, one of whom came with us. He took the Irish TDs—much to their astonishment—for a walk in the centre of Belfast. It was an extraordinary experience, unaccompanied by any publicity. It was not a media event or part of a media circus; it was an example of how people can come together in good faith in the interests of their community—the island of Ireland.
One of the proponents of the new consensus scheme to which my hon. Friend referred comes from my constituency, and I welcome that involvement. The peace train is an example of people power. We often heard about people power in the 1960s and sometimes in the 1970s, but we have heard very little about it since then. The peace train is an example of people power, of people of good will sending a message to terrorists—whoever they happen to be, and on whatever side of the divide they stand—that enough is enough. Terrorism creates orphans and widows; it does not resolve constitutional difficulties.
I commend my hon. Friend on choosing the Adjournment debate and I am grateful to him for allowing me to speak for a few minutes.

Dr. Norman A. Godman: It would be remiss of me not to compliment the honourable work of my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes) in connection with the remarkable peace movement. Earlier today in an extraordinarily brief speech—extraordinarily brief for me —I offered my compliments and support to the people involved at a gathering in the Grand Committee Room.
The Minister has listened sympathetically and attentively to my hon. Friend's fine speech. I need hardly say that the beleaguered Province could be helped by the institution and recreation of the parliamentary institutions that we take for granted. I make the plea, which was also made last night by the right hon. Member for Lagan Valley (Mr. Molyneaux), that a small way in which we could help things in the Province would be the setting up of a Select Committee on Northern Ireland Affairs. In terms of democratic institutions within the parliamentary framework, that would be an extremely fine gesture for the Government and the House to make to the people of Northern Ireland.

The Minister of State, Northern Ireland Office (Dr. Brian Mawhinney): I add my congratulations to the hon. Member for Derbyshire, North-East (Mr. Barnes) on the way in which he introduced this short debate. I thank him for the happy circumstances that allowed the debate to take place on this day. I endorse the views expressed by the hon. Members for Middlesbrough (Mr. Bell) and for Greenock and Port Glasgow (Dr. Godman), both of whom have strong records of support for peace and better community relations in Northern Ireland. I pay tribute to both of them. I have heard the particular suggestion of the

hon. Member for Greenock and Port Glasgow. I hope that he will forgive me if I do not respond to the substance of that in this debate.
I pay special tribute to the hon. Member for Derbyshire, North-East. I know that he would be the first to say that the responsibility and kudos for the organisation of the peace train and its activities over the past couple of years, and especially the events of recent days, should go to others. I know that he would want that put on record. Nevertheless, it is right that the House should recognise that the hon. Gentleman has been a staunch supporter of the peace train movement and its activities, and of Families Against Intimidation and Terror on many occasions in the House. He has a bright and shining record in terms of cross-community activity. As he has told me on a number of occasions as we have debated these matters, his commitment arises out of his socialist beliefs. However, he has always recognised that whatever the motivation of various people who share the same objectives and aims as he has, he is willing to work with them. I pay tribute to him for that.
I join the hon. Gentleman in condemning all those who involve themselves in acts of terror and violence in Northern Ireland. He was right to stress that that condemnation extends to all those, from whatever source or corner, who engage in violence.
I was glad that the hon. Gentleman expanded the concept of the peace train and linked it to what has happened in Great Britain. I was also pleased that he was able to say a word of appreciation not only to the trade unions, but to British Rail for its co-operation in the endeavour.
There have been people who thought that by disrupting rail services in Northern Ireland, they were in some way scoring some big point. They were not. The hon. Gentleman was right. They were involved in economic disruption and it is especially ironic that those who give support to economic disruption are at the same time claiming in the newspapers to be friends of investment in Northern Ireland and to be looking for more jobs. They complain that other people do not provide more jobs in the Province. If Sinn Fein and the supporters of the Provisional IRA were more committed to the people of the Province, they would be less committed to condoning violence and more interested in promoting employment and new investment.
The hon. Gentleman was right to say that such people were involved not only in economic disruption, but in personal disruption. It is one of the pleasures—that may be an unusual word to use—of being a Northern Ireland Minister to see from time to time activities that are designed to drive people apart having the opposite effect —drawing people closer together and breaking down the boundaries that have existed for many years. Those who have been involved in the peace train activities in Northern Ireland epitomise the spirit of many similar groups and individuals throughout the island of Ireland who refuse to allow violence to cause lasting damage to cross-community relations.
The hon. Gentleman was kind enough to mention the fact that my right hon. Friend the Secretary of State has sent a message of support. In the past few days I have been asked to provide a similar personal message and I shall do so. However, I have been able to put my money where my mouth—and my pen—would normally be. As he knows, I have responsibility for the central committee for


community relations. He will be pleased to know that the Northern Ireland Council for Community Relations has, to date, provided £8,500 for the funding of the peace train movement. If the movement introduces other projects that fall within the parameters of the community relations funding that we have set up in Northern Ireland, I am prepared to consider whether we can provide financial assistance for those projects. I hope that the hon. Gentleman will understand that that is a commitment of support, whatever the amount of money involved. The sums are not large but they are nevertheless important and can be used effectively. I hope that the hon. Gentleman will accept my comments in the spirit in which they are offered.
The hon. Gentleman is right to draw attention, as he has on many other occasions, to Families Against Intimidation and Terror. He has spoken warmly of them and supported them before. It could be said that FAIT's work is conducted on a voluntary basis and has enjoyed, in its turn, some support from the peace train organisation. The hon. Gentleman will also be pleased to know—we have not mentioned it in public before—that the central community relations unit has been talking to Families Against Intimidation and Terror to see whether we can assist it. I am happy to say that we have agreed to provide a seeding grant of £4,000 to enable it to prepare a strategy for its future development, which we hope will have been prepared by the end of September. Again, although the sums of money are not large—in this case they do not have to be—they are a reflection of the support that the Government are prepared to give to those involved in a variety of activities and who seek to build bridges to accentuate the fact that, in Northern Ireland, people work together on a cross-community basis as a matter of course. They often pay no attention to the fact that they are working together on a cross-community basis and it has been most encouraging to see the growth in cross-community activities in the past few years. There is no time to set out all the activities now taking place in the Province which seek to enhance that common ground. The hon. Gentleman referred to that as a concomitant of the political processes in the Province.
The hon. Gentleman mentioned trade unions and he will be pleased to know that I have visited one of the trade

union headquarters in Northern Ireland and talked to its members about providing substantial support over a number of years to develop a programme within the union to bring people together. It could be used as a basis for extending the programme to other trade union activities in the Province. We are also talking to business and industry about what they may be able to do in the workplace to extend cross-community support.
The hon. Gentleman also mentioned integrated education. It is a matter of personal and governmental pride that, later this year, the new buildings for Lagan college will be open—it was the first of the secondary schools with integrated education in Northern Ireland. It is now one of only 12 such schools, but the number is growing at the rate of about two a year. In those schools parents from both sides of the community—because they demanded it, not because the Government willed it—have their children educated in the same classroom. There are children from both sides of the community in a school which places an equal value on both traditions—an important aspect.
Hon. Members know that integrated education will not be a panacea for the problems in Northern Ireland. Changes in the curriculum in schools include education for mutual understanding, cultural heritage, a unified history curriculum for the first time, and agreement is imminent on a core religious education curriculum—all of which will be applied to all the schools in the Province. That shows the way forward that is being taken.
We have had a good debate on a subject which is important and is changing the face of Northern Ireland for the better. The message that should go out from this debate is clear: terrorists should know that there are far too many decent, law-abiding, democracy-loving people in the Republic of Ireland, Northern Ireland and Great Britain for terrorism to succeed, whatever the price. The desire for peace which is in the hearts of the majority of people will ultimately defeat terrorism. I pay tribute today to all those who have brought that day one step closer.

Question put and agreed to.

Adjourned accordingly at three minutes to Four o'clock.